1-13-14 Handout- Mike Whalen Kevin Evans Joins CenterState Bank as Commercial Lender- The West Volusia Beacon Page 1 of 2
�r _ I DELA-ND NISSAN `Vow '2.rf G' : `J.
12-Seat— :.
pa er. --+ { From Economy to Luxury,Minivan tO Cargo Van
• Vehicle -- -- --- Nr55AN
Y — Click here for Rates,or Call Nicola today 386-734-3003
West Volluusia's community newspaper roof�DeLand,Orange City,Deltona,Enterprise.DeBary.Lake Helen,DeLeon Springs.Glenwood,Pierson,Cassadaga,Seville and Barherville in Florida.
B N Volusia
S� A83toi. Read The Latest Calendar Family News, Find A... J Beacon
8 ( _ Print Editlon! of Club News Directory
SUBSCRIBE I LOGIN Events and more! Listing Magazines
L.i
NEWS Sports Obituaries Free Classifieds Opinions Entertainment Community Photos and Videos Beacon Info Contact Us Archives Advertise Public Notices
News a Recent News West Volusia Wire Police Logs Photos Videos Business Briefs Local Businesses About Our News Send Your News
January 13,2014
Enter search... Kevin Evans Joins CenterState Bank as to a send s
friethind Like {1.2k
Search Site J Commercial Lender
West Volusia Beacon
Newsstand Locations 110 W.New York Ave.
DeLand,FL 32720
Subscription Specials By 386-734-4622
AMC". sted Mar 19.2013-3:32:41 pin ^,'
'�a" • Searchable • Portable
CLEARLY THE GUM VOICE Text Size 1
CPAAJUSIA ccuNfy - _ • Archived Back issues
Listen Tim Pierson,Community President of >- _ • Paperless
General Banking with CenterState —
/Vow Bank,announces the appointment of �,,,,, "'
C lick Here .„.W ,
Kevin D.Evans as VP of Commercial �$
Lending.Evans is responsible for �n Read the entire
- ---- assisting business clients and local `i print edition of
• area builders throughout Volusia and — -�� �J The Beacon
Debbie's I Brevard counties in obtaining the best A— online.
HEALTH FOODS Commercial loan product to meet their _ -
Where Quality Matters individual financial needs. -- -
NB0:: 1
sejj I During his sixteen year tenure with Indian River County's former Indian River National _'
i2 Srp Bank,Evans served as Senior Vice President/Area Executive,responsible for all aspects
of commercial and retail banking.He and his family moved to Michigan where he was a
SAVE 20%OFF Senior Vice President for another financial institution before relocating back to Florida. - -
All Regularly Priced ivrns I -1'4Twedayotthemonth. Evans graduated from Albion College,Florida School of Banking and Oklahoma State _Commercial Lendin School.He has had solid ties with Habitat for Humanit and the
Click here ivr Lending Humanity INSURANCE AGENCY
COUPONS Florida Bankers Association.
Pod O rang o•orango City Office:386-734-9642.800-451-7661
_- CenterState Bank of Florida N.A., www.pageinsuranceagency.com
My ads are seen on an independent Florida bank /� �� ,��urru�
BeaconOnlineNews.com based in Winter Haven,is owned /�ztieetw9'%----[F.ihneid.,
1",,,' s�" ti by a Davenport-based holding We were there when you first decided to follow
_ company,Centerstate Banks Inc. ,
V ';:�c' \ 4---- (. The holding company has 55 your passion.Today,we're still here keeping all
I ' .7'' '' branches and combined assets of you have built Safe.Sound.Secure®.
NSTR E .,. nearly$2.4 billion.That ranks it A
FILL�� 1 among the top Florida-based u?uto-Owners taro.oM„r.:�,w,..rM
° ,,o,,,•'., t, - banks.CenterState Bank has been
i -- j, . recommended by Bauer Rating
Click hereto( Service(an independent bank
Special Deals t Advertise with The Beacon 'rri `"i,' rating and research firm in Coral, � j 'I P Gables)for 78 consecutive
•X� i quarters.
_4 The bank specializes in small
business services as well as
checking and savings accounts,consumer loans,commercial and residential lending,
rJ'[
FREE financial services and internet banking.CenterState Bank branches servicing the greater
Volusia County are located in Port Orange,New Symrna Beach and Orange City.Hours
Financial are 9 a.m.to 5 p.m.Monday through Thursday,9 a.m.to 6 p.m.Friday.Evans may be y
contacted by calling(386)689-8094.
Advice! — W1
INVESTwifhBUBBAcom
Reader Comments
The continents posted below are posted by readers,not by The Beacon staff.These comments express
the views and opinions of the authors,and not the administrators,moderators or webmaster.The
http://www.beacononlinenews.com/news/daily/5843 1/13/2014
Document Detail For Records (Left Frame) Page 1 of 1
Result Row:
Instrument if Prey 2013221935
Docunio t Naas : s:'sss
J Pr Vi 11 l a:, ;- Next t I or;, ine5 ,
BO kt pez nffinial RPr.r
O! 16506 1523 Jump To
Document (CERTDEED) CERTIFICATE OF TITLE DEED
Type:
Record Date : 8/27/2013 11:38:30 AM
Grantor: SHOPPES LAKESIDE INC ETAL
THE ATLANTIS JAX BCH INC ETAL
SURFACE TECH ETAL
HIONIDES CHRIS ETAL
JACKSONVILLE CITY OF ETAL
Grantee: CENTERSTATE BK
Book Type: OR
Book / Page: 16506 / 1523
# of Pages: 3
Consideration: 100.00
Legal: TRACT CASTRO Y FERRER GR 38 2 29
Case Number: 2011CA000566
Note: Empty fields are riot shown
Direct External Link to this Documot
4 dietzsm
._c2tts ciR)img
. •
P1C'
http://oncore.duvalclerk.com/details.aspx?BookType=OR&Book=16506&P... 1/13/2014
Document Detail For Records (Left Frame) Page 1 of 1
Result Row:
Instrument Q Prey 20/3241113 `; °'=::h
Doryrycunilenyyt``NovyioNi ioln2 Document Praayy yn: �y p G
clPreNious Document° Next )oc lyacn .r)
ook yp ' nffirial Rac:r
Hoot 16531 ;; 2248 Jump To
Document (DEED) DEED
Type:
Record Date : 9/18/2013 2:17:35 PM
Grantor: CENTERSTATE BK
Grantee: BEACHES HABITAT FOR HUMANTY INC
Book Type: OR
Book/ Page: 16531 / 2248
# of Pages: 3
Consideration: 1,100,000.00
Legal: SEC38 2 29
lUot Ling y fields arc,not shown
Direct External Link to this Document
http://oncore.duvalclerk.com/details.aspx?BookType=OR&Boole=16531&P... 1/13/2014
Habitat for Humanity receives $15.3 million HUD grant I Habitat for Hum... Page 1 of 1
purtA y l:xe-rr:E
United States/Canada Habitat
for Humanity —- _
Got involved About Us Where We Build Support Habitat Shop Stories&Multimedia
Home
Vi Habitat for Humanity receives $15.3 million HUD grant
ATLANTA(June 22,2011)—Habitat for Humanity will receive a$15.3 million"sweat equity"grant from
the U.S.Department of Housing and Urban Development. Funded through HUD's Self-Help
Homeownership Opportunity Program(SHOP),the grant will help Habitat build more than 800 homes in
partnership with low-income families nationwide.
"These grants are about rolling up your sleeves and getting the job done,"said HUD Secretary Shaun
Donovan."With a little investment and a lot of elbow grease,these organizations,volunteers and the
families work side-by-side to build their homes from the ground up."
The SHOP program provides federal grants on a competitive basis to national and regional nonprofits.
Guidelines require homeowners to participate in the construction of their homes,a core principle of
Habitat for Humanity since its founding in 1976.Habitat affiliates can apply to receive up to$15,000 per
home in SHOP funding to purchase land or to install or improve infrastructure. SHARE
"We are very pleased to be a recipient of HUD's SHOP grant awards,"said Jonathan Reckford,CEO of
Habitat for Humanity International."By leveraging this money and creating partnerships with the private
sector and other nonprofits and community groups,we can bring people together to make a significant
impact on communities all around the country.The SHOP grants are integral to Habitat's ability to serve
increasing numbers of families nationwide."
Habitat has received SHOP grants each year since Congress first appropriated funding in 1996.Overall,
Simple, decent, Habitat's total$159.9 million in SHOP funding has been used to help more than 14,000 families obtain
safe,decent and affordable housing;another 1,000 homes are in progress.SHOP 2010 is the largest
affordable housing competitive award Habitat has received to date.
About Habitat for Humanity International
Donate Now
Learn More Habitat for Humanity International is an ecumenical Christian ministry that welcomes to its work all
people dedicated to the cause of eliminating poverty housing.Since its founding in 1976,Habitat has
Volunteer built,rehabilitated,repaired or improved more than 400,000 houses worldwide,providing simple,decent
and affordable shelter for more than two million people.For more information,or to donate or volunteer,
Advocate visit habitat.orq.
� - r 3 f, ., air i; PA®
U )-='13�SSt 9L�Hti'fa3'3S. �Ft if'o... J tt.}!)u -a, X 'i:v.t•Ir S.r3'3 5}..: .: 'e7 1.�,=1:.. _o-,..A 4.fF._+�.it•b'3b.'idt f-{.lf-i'3T,'3.ti{tLac.�t k�_�F.s�(.... .i _F.-I L-}
Hab5311.;Yt£umsnftl(3,333,:".i.nd.:H32;titcitiorox,rt rte n_.ensL _ta:sx. .L. •tr_;- -,nrgri.d,7alcitc,r a
ziY6 (irk)
zrz52)
k)(
http://www.habitat.org/newsroom/201larchive/06_22_2011 hfh receives_... 1/13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 1 of 17
Is there a Ripoff Report about you! ? SEG Reputation Management WARNING! Click Here Now!
Ripoff Report I Complaints Reviews Scams Lawsuits Frauds Reported. File your review. Consumers educating consumers.TM
By consumers, for consumers...
— Ripoff Report Verified Business DirectorytM-
0 J p
el Reuort
Don't let them get away with it.® Let the truth be known!* verified wears I si±OHNuW
__.buslnossets yeu pan busU - q" < - �` '=
Home Help Register to File a Report Login
Total Visits since 1998: 8,820,000,000 Estimated money Consumers saved since 1998: $15,449,000,000.68 Reports filed: 1 ,739,000
FILE A Update Latest Consumer Consumers Legal —# Re r«�rertwa+ therrinvar ""'°=n' "" ' °r Re r` :
REPORT a Report Reports Resources Say Thank You Directory
• Corporate Advocacy i... Submit Que
• Ripoff Report protects consumers first amendment right to free speech Review Latest Reports Advanced Search Browse Categories
$
r «
4
Report: #677104 T - ern
i �
Complaint evlew : Habitat for Humanity .. Y ic _
Related Reports I Submitted: Thu, December 30, 2010 Updated: Sat, July 14, 2012 - _ '
Reported By: Me Who — Payson Arizona USA
Mark Kalish MD Forensic a ii — 01 :37 02 04 I —* 0
Psychiatrist in San Ileac Dr. _. ._ .
KalishDr. Made KalishMark Kalish A
total disgrace to medicine and Habitat for Humanity Phone: 928-474-0330 W I IUC lender U1 � !1
humanity! San Diego California 103 East Hwy 260 r , ite lende n
Web: www.paysonhabitat.com
Payson, Arizona �"- .
Coastal Habitat for Humanity Category: Nonprofit Organizations "—
United States of America C W O'er
Maureen Mulligan Coastal Habitat 1-BOOLOMIMART a.- °'
for Humanity Discriminates the =. -
Disabled Sprang Lake Heights New _ . . �.- ksn't"'`aj
Jersey Habitat for Humanity Payson Area Habitat %to
Kewn Smith Pool Contractor Florida tj *" `
Wet Outdoors dba Lush Habitat, For Humanity - The Problems I 've
wet Outdoors, Blue Haven `-,�
Scammed money, did not finish '��
protect, flied for bankruptcy arid
Encountered Buying A Habitat Home , And G t ' G lyOU
slated a new company Boca Raton
Florida How Those Problems Turned Me Into A and you keep your cart
Habitat fur
and elltheawe/Al Criminal Payson , Arizona : t. ee. � '
Wake up and smell the deceution ._
Cplpredo Colorado
C&R BogerConstrucifon REVIEW *Consumer Comment: to the person who said HFH has to pay
Customer Satisfaction Commitment lawyers.. . 2ftiroll C&R Brnmmited to customer Report
satisfaction, C&R Boger vNl7{�Y
Construction is a Habitat for *Author of original report : End Result verified
Humanity Community Contractor. .. businesses you can trust!
C&R Boner fully licensed I insured. *Consumer Comment : fellow american �., �t,, ,�. .�
Residential and c rnmerciai , t # oi.Y vd
rerriodeliim. quality workmanship .� ,
and construction matenais Internet *UPDATE EX-employee responds: This is standard habitat
_ x$3991
'UPDATE. Recognized by Ripoff
operations -2.--t >'; i , GetdleCa
Report Corporate Advocacy scs m . /1,'
4° 2rKl k£Ep
Pnxlram as a safe business service `*
C&R Boger Construction oledges to : *Author of original report : Update On This Story! - LimItcd rim¢ aver`
atways resolve any issues feel safe.
confident & secure when doing *Consumer Comment : More to the story Advertisers above have met our
business with C&R Boger y s t s a dards7. business .,d .
Construction .. .
*Consumer Comment: I had an HFH home once myself _ „. ,,, _- - , _ .4
habitat for humility l have tried to get : t,DARCAPITA# IS -
balance of my montage since feb of t !A GOOD HONEST TheForeYMarket lsa
*Author this year and all i get is the round of original report: Something More I Want To Add To My BUSINbas" coMMfJ;nD tentralizedEltdtan e
around east st louts Illinois 7 100% CUSTOMER 9
Story! SA'TTSFACTION'',' ME RUSE
E
Aaron C. Kalmar Aaron C. Kalmar rn:.w main ,,a„�„
Landscape, Habitat Landscape Like Recommend this on Google Tweet c 0 mw�[naa `�"" ^�' Submit
L_..
{v•! ir`xitr
Changing names doesn't change the
service Highland Michigan - - - '
International Humanity Fundation REBUTTAL BOXTM I Respond to this Report! '
Fraudulent Misrepresentation NGO
San Diego California
t Aribitrate & Set Record
Newberry Habitat for Humanity Safe t Add Rebuttal to this Report j 1 Straight
_.
£. Healthy Housing? That's their p g
Mottos LaPine Oregon
t)abatat for Humanity individual
1 File New Report 1 C Repair Your Reputation I
Juniata county Pennsylvania
Just today I discovered this website with a handful 3 5 0
of Habitat for Humanity complaints. I am in a Author Consumer Employee/Owner
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 8 5 541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 2 of 17
Featured Ripoff Reports strftsls t ttcia o it 19c i ., ! 7 SEG Rep T„ * rourP f e' �,'€tr Ra)Ifttf Ff -1 ' Click Here Now!
Humanity chapter, so after reading other . Better uelness Demers? I ;
complaints and responses, I decided I'd tell my
p story here. This version of my story will be
thorough, but not as detailed as the website I am a . - 4/ n M€CENTRAL
~
in the process of creating. That website fully �� T
details every aspect of my struggles with Habitat. BBB
That website is called No Humanity For My ''
Habitat, and you can access it at y`
-, � Does your business have a bad reputation?
A r www.nohumanityformyhabitat.com. My problems Fix it the right way.
with Habitat are expansive, and the one thing I've Corporate Advocacy ProgramT°
Ben Smith Sac County discovered over the last year is that there is little
Iowa Attorney y SEO Reputation Management
prosecutorial accountability for Habitat. It seems like they can
misconduct, improper at its best!
relationship with star get by with whatever they want. Mostly what
Habitat has done in response to complaints coro is
witnesses, allowing P P witnesses to knowingly demonize me and make me look like an uneducated fool. They've done a good job
lie. Tracey Richter discrediting me even though my complaints are more than valid. I will describe all the
Roberts falsely = "
convicted, overwhelming wrong doings below. I HAVE MADE NOISE in trying to get my story out. I've complained ; LE1 .)' c/1: i14 : fi A. vGO E ,.
evidence leads to to as many people within my local Habitat chapter as possible, but they've mostly
estranged husband
l'* J�T � '
Michael Roberts, ignored me. I've told as many people in my community as I can, but I have yet to find j 7yl, T
Rexxfield failed anyone who will truly help me. I have filed a formal complaint with Habitat International it TO CUSTOMER `�'
polygraph, witness only to have Habitat International tell me they see no wrong doings, and that any
intimidation, evidence x 777
tampering. Iowa Division problems I have must be resolved with my local Habitat chapter. I filed a complaint with SATIS FACTI 0 N ,;;` `
of Criminal Investigation the Attorney General in Arizona. My complaint to the AG was as objective and thorough
corruption. "
as can be, but Habitat's response to my complaint was filled with very blatant mis-truths. ED MAGEDSON {jptpt,BRepau
The New "Digital Extortion" It seems the Attorney General believed Habitat's false response, because the AG wrote ipunrrTSxzsrxtrnrr ktPOrcr named #
Is there a Ripoff Report on you?
me back saying they see no wrong doings, and can provide me with no help. I will go
into more detail with this later in the story. Below is my account of the problems I've t 1> r
encountered dealing with Habitat for Humanity, and how buying a Habitat home has
__ - turned me into a potential criminal.
rr My wife and I moved to Payson, Arizona in August of 2007. We had been living an
adventurous lifestyle, working in Alaska in the summers, and in the desert southwest in
--- -°°° the winters. We worked in tourism, adventure travel, and the outdoor industries. We
Reputation Management were living full time in a small RV. It was a great lifestyle, but my wife got pregnant in n r. ”-7CENTRAI.
SEC) WARNING! early 2006 while we were guiding for an outdoor school in Utah. We had our first son in 1 , 4 `'
They might contact you next! x '
Alaska in September of 2006, spent that winter in Arizona, and worked the 2007
summer in Alaska again where my wife got pregnant fora 2nd time. The 2nd pregnancy
Past Featured Reports
was going to put a temporary stop to our nomadic life, so we decided to move to ff
Arizona. We landed in Payson, and 3 1/2 years later haven't left. 2 months after we I . ;) t3 ' ) ..
Ripoff Reports moved to Payson we decided to open a small bicycle shop and outdoor store. We had .: aji
the store up and running by November of 2007. It was a pretty random idea to open a f _ .,
Music and ! retail store here, and we took a big risk in doing so. Even though the national economy
a o Hon ins was going downhill, our new retail store did well from the start. We invested a lot of
website money into the shop, which meant we couldn't afford to move out of the RV. 2008, our - • II millramsmoms=02za 00 22 u_ 0 t 41 111 • (
V&A') musicanlcommerce.corn he first full calendar year in business was incredible. I thought we had landed on a gold
stipulates associations dealings and -
arrangements with fashion icon Karl mine, but bicycle shops were late in getting hit by the economy, so it wasn't until
Lagerteldt and a European Head of 2009 as our town was being decimated by the economic downfall, that our shop's
State First nl5 o one tin Four ilePO
Seasons in Pans d the revenue was taking a downturn too. Early into 2009, my wife and I were looking to buy a
arrangements of meetings with new home, but by early summer, we knew there was no way we could afford to move I
Formula I and Ferrari at the Hotel out of the RV. I was working every week of the year, 65+ hours every single week, at Min r"'— .
de Paris in Monte Carlo etc. This -
information has been verified as hardly taking a day off, taking no vacation time, and barely making above minimum
untrue. north bercen New Jersey wage as a small business owner. My wife and I sold off every big possession we had
11
Business's (
2a5MU$Clg except for the RV which we were living in. Friends of ours in Payson had told us about )
Lipo G3 Scam Habitat for Humanity. For about 9 months straight, they encouraged us to apply for a Lawyers and Law Firms (5312)
-- 0 Pompano new Habitat home, but I turned them down over and over. I wasn't interested in buying a • Administrative Law (11 )
,::'�.; Florida
low income home even though my entire family was living in a tiny 21 -foot RV. My wife • Admiralty & Maritime Law (27)
` its Miracle Saffron gave birth to our 2nd son in March of 2008, and she gave birth to our daughter in May of • Agricultural Law (2)
Stole my money 2009. We had 3 kids in 3 years, all 3 kids were in diapers, and we were working so hard • Alternative Dispute Resolution (10)
sap Diego Y . 9 • Antitrust & Trade Regulation (1 )
California to stay on top of all aspects of our life. It was hard to juggle everything, and the RV was ■ Appellate Practice (72)
eARMIN GPS becoming too small for all of us. After our daughter was born, my wife and I decided to ■ Aviation & Aerospace (11 )
" PHILIPPINES look into the Habitat option. It was the only real option we had to get us out of the RV. • Banking Law (90)
We called our friend, he put us in touch with his mom who is on the Family Selection ■ Bankruptcy (380)
Committee, she encouraged us to apply, so we did. We were quickly approved for a • Business Law (232)
Makafi Philippines
Habitat home, but we only had 5 months to fulfill all of Habitat's requirements. 5 months • Civil Rights (55)
Supple Solution to fulfill all Habitat requirements is not much time. Most families get 1-2 years to work • Class Actions (301
-Supple ■ Commercial Law (13)
Solution% with Habitat, so you can only imagine how stressful it was for our family to take on a • Communications Law (1 )
Cbwns of large task while running a busy retail store, while parenting 3 kids 3 and under.
Richmond Melbourne Inn a very ■ Constitutional Law (1 )
angry g dissatisfied ex client of Habitat gave us 500 Sweat Equity hours to start, and my wife was at the Habitat jobsite • Construction Law (83)
these clowns. I would not every day earning our fool! • Contracts (7)
recommend them to anyone. rY Y 9 family's Sweat Equity. I couldn't be at the jobsite because I was ■ Corporate Law (75)
Richmond Melbourne victoria so busy with our store. During the 2009 summer we couldn't afford an employee (we ■ Criminal law (668)
Rick Cranford had a bike mechanic helping us in 2008). All the economic downturn meant for a small
Patrick Ramos business owner like me was that I had to work twice hard for half as much pay. During • Debtor cato Law (14)
,,,; ■ Education Law (14)
._ ,- __ & Patrick Tavlor that 2009 summer, I worked 3 months straight with barely a day off, and I was working • Elder Law (77
This is a ring of )
people involved in taking others 10-12 hours every day. My wife and I made an agreement that she would focus on the • ElectionCampa!gn & Political (0)
money. Excelsior Minnesota ' kids and Habitat, and I would focus solely on the store. My wife is integral in helping with • Eminent Domainf51
Home Street Movers/ Moving Cross the store, but because she was working hard with Habitat, I had to work even more • Employee Benefits (7)
Country, bra USA Straight Forward hours in the store to compensate for her not being there. It came back to us pretty • Energy (0)
Moving USN? THIS COMPANY it Entertainment & Sports On
http : //www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 8 5 541 /Habitat-for-Humanit. . . 1 /13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 3 of 17
WAS q u C1y }}f�at Cep ir1 w }� �7 c� r OG I �{a tom} a {�[ {Ip } Ilk } }hqt I Wasp nv! nmental Law (43
\ 7' WASH 1ARE CI 1S�l Ila cf tt Oarml rl c"7pUU1� MI ti2b ,t0aP IIUn N(ailiWit7ETflt 4VNft��11NG! CIiC�C I � G fS� 1 )
<k -4..-t FROM DAY showing up to the jobsite. I can see where they were coming from, and if I was at home • amlly Caw (13)
• . ; ONE',i DO watching sports, they had a good point, but because I was working so hard trying to is Finance (0)
NOT USE!!!! keep our shop from going under, Habitat had no means to criticize me for not showing ■ Government (14)
Fort Lauderdale Florida • Government Contracts (2)
GLOBAL PET up at the jobsite. It was even discussed at a Habitat Board Meeting that Habitat
• Health Care (1 )
DELIVERY volunteers would come run my store so that I could go to the jobsite. What a realistic ■ Immigration (482)
GLOBAL concept! Like I am going to hand over my entire store to a Habitat volunteer so that I ■ Indians & Native Populations (1 )
r TRANSA ONE can go do Sweat Equity. The bottom line is if I am not in my store, my store can't make • Insurance (90)
,= i INDIVIDUAL
sHAr, money, and if we don't make money, how are we suppose to pay the mortgage on our ■ Intellectual Property (526)
AT ARD!s! new Habitat home? Habitat should have been praising a hard-working middle class ■ International Law (33)
CONTACTED ME WICLAIM HE father like me for working so hard to make ends meet. Instead, I felt like a handful of ■ International Trade (0)
NEEDED 3440-an adoption out fee. • Internet Law (7)
Then contacted by -GLOBAL Habitat volunteers formed a grudge against me.
TRANSK who man email stated • Investments (1 )
there wasa hitch, insurance was About 6 weeks into the Sweat Equity process, Habitat told us that if we didn't have our • Labor & Employment (12)
needed for the airplane. BUT I cook Sweat Equity fufilled by mid-November, we would lose our home. This news came late ■ Legal Malpractice (92)
send S1200 and when they • Litigation (20)
delivered the bird I would be as we thought we had more time to work with. The problem was our local Habitat
refunded 31154 w/delvieryof the chapter wasn't building one site built home for one family at a time, they were building 5 ■ Media Law (1 )
bird. CAMAROON Internet • Medical Malpractice (13)
condos interconnected in a Habitat specific condo complex. Habitat had $50,000 dollars ■ Mergers & Acquisitions (p)
. Seacret in government grants that was given to build each of these homes $250,000 taxpayer
. Cosmetics ML ■ Military Law (5)
fy
1 Beautt dollars in total), so Habitat had very specific requirements to follow in order to not lose la Natural Resources ( 10)
Cosmetics those government grants. Habitat had to have all 5 homes signed for and occupied by a • Occupational Safety & Health (0)
False uriann. certain day, mid-November of 2009. Out of all 5 families approved for these new • Personal Injury (842)
Koh pressure sales_ 1/4 of fair retail
pdce found online Los Angeles. CA condos, my wife and I were the only married couple. The other 4 families were • Products Liability (21 )
90036 California comprised of single moms. There are 13 kids in our phase of 5 condos. The single • Professional Liability (01
NAVI moms only had to tuff II 300 hours of Sweat Equity. Habitat knew it was iffy on whether • Real Estate (361 )
s TECHNOLOGY we could get 500 hours in by November, so our local Habitat's Board of Directors voted ■ Securities (169)
osilin CROUP • Taxation (142)
PHILIPPINES to reduce our hours to 300 making us even with the other 4 moms. That was a nice ■ Technology & Science (0)
BEWAREi gesture, and we are grateful they did that for us. • Toxic Torts (0)
COUNTERFEITGARMIN GPS ■ Transportation (2)
PRODUCTS! Makati PHILIPPINES During the Sweat Equity process, we didn't really know any real problems were forming. ■ Trusts & Estates (368)
Israel Avi ez We trusted Habitat without question. We assumed they would do everything properly, • White Collar Crime (1 )
Fraud Loan with the ideology of putting the low income homeowner first. It wasn't until we signed for • Wills & Probate (7)
Broker. Fake our home that the real problems began. During the Sweat Equity process, we had to • Workers Compensation (242)''. Scam Artist
ffi'
Thief. lI
n ef. enai attend mandatory educational meetings. In these meetings, Executive Habitat Board • Zoning, Planning & Land Use (10)
r Gilbert Arizona Members went over every rule and regulation pertaining to our new homes. I am a fairly Legal Services (32)
educated, fairly intelligent individual, and I ask a lot of questions. One of the first • Arbitrators/Mediators (7)
Lynn questions I asked was what the selling price of the home was. I was told by someone on • Automotive Expert Witnesses (0)
Community
healthi Health Center the Family Selection Committee that our homes appraised at $160,000 dollars, but were • Bail Bonds (0)
CENTER Inc being sold to us for $142,000 dollars. I thought $142,000 dollars was high for a 1180 ■ Court Reporters (1 )
Incompetent, square foot condo in a low income housing complex. I did question the validity of that ■ Electronic Data Discovery (1 )
Rude Staff Lynn Massachusetts
price, but I accepted it as the selling price. In one of those educational meetings, ■ Expert Witnesses (1 )
Pdvate Label ■ Forensic Experts (1 )
multiple Habitat Board members were present. I asked out loud to everyone in the
I „ a tank! Nuvaceuticais ■ Jury Selection (0)
Biome Rene meeting whether those Habitat Board Members thought that at the selling price of ■ Legal Assistants (8)
FTC & FDA $142,000 dollars, we might be upside down in our new homes because the housing
Raid Private Lane) Nutraceuticals market in Payson was being decimated by the economy. Housing rites were falling ■ Legal Speakers (2)
Client List EXPOSED, Norcoss Y 9 Y Y 9 P • Litigation Support (2)
Georgia across the board, and $142,000 dollars bought a pretty nice home in our town in 2009, • Medical Expert Witnesses (1 )
Konstantln let alone a low income condo. I asked that question to 5 key people in the Habitat • Other (14)
Kon»utsev organization, and none of them corrected me or said I was wrong In saying the selling • Paralegal (5)
I<osha Worst price was $142,000. Habitat's response to my question (this response came from • Private Investigators (6)
someone who recently ran on the Democratic ticket, though ultimately lost out to be the • Process Servers (7)
€ . g next Arizona State Senator in my district) was that they never took into consideration • Translators/Interpreters (0)
,
roommate;tenant, renters beware!!! that housing prices might be falling, and a key Executive Habitat Board Member actually Miscellaneous Business Services (19)
NY New York looked me in the eye, in front of a dozen people and said, yes you might be upside
ALL COAST down in your new home. What? I couldn't believe it! It was the first major red flag to
BUILDERS LLC come about. Habitat was admitting ahead of time that they were selling low income
MANUEL JARA condos for more than their actual value. Even more amazing was that the actual selling
Only compieled
40% of the work price of the home proved to be a lot higher, but we wouldn't find that out until the actual
and refuses to signing day. The bottom line to the educational meetings is that Habitat went over all the
- " ` return the
difference or finish. Manuel Jam Is a rules and regulations in those meetings. Habitat made us initial many a document in
thief MIAMI Fonda those meetings stating we would follow their rules and regulations. It never dawned on
s r, K fir".
Pak,mh,o Gill me they wouldn't follow them in return. What made that worse was that our local Habitat
=_ + Annela Lawson chapter was very adamant in saying that if you didn't follow their rules, you wouldn't get
a, - Tiffany Fadess. your home. Habitat had a 6th single mom lined up to take over in case any of the other
Ep:; EZRide Farm,
Southern families fell through. It was openly discussed that Habitat felt we would be the family
comfort Farm, who wouldn't ultimately fulfill all the obligations, so you can imagine how we felt when
Thundercreek Farm, Thunder Creek that 6th prospective homeowner would show up to our new house to do her own Sweat
Farm, (aka) Angela Jones.
foot-chairs roe repairs, J and M Equity in hopes that she would ultimately get our home. I'd like to know how many other
small Engine Palomino Girl Buyers Habitat homeowners across America have people come into their new homes with the
Beware Of This Hone
TraderiSeamer Murfreesboro intent to take them away? While I don't blame Habitat for having an extra family lined
Tennessee up, it was disheartening to feel all the hard work you were doing to qualify for this new
2chashsite i ve home was regularly on edge of being lost.
2cashait=n worked for them
and i've made About 6-8 weeks before we were to sign for our new homes, Habitat dropped a
6009 dollars and I was never payed bombshell on all of us homeowners. They told us we were responsible for painting our
for
Inteth
nee
elasp i made on-line based own homes. I was livid when I heard this. Habitat even went on to say that we were
responsible for painting the exterior backyard fences on the homes. Even for the
Sole clinics EJ families that had' already fulfilled ALL of their Sweat Equity, Habitat still made them paint
.r.,41/2,,,-„,...... , FERRER
:! c1 RIPPED OFF the homes. Before we were told that we had to paint our own homes, the Executive
EXPENSIVE
Director of our local Habitat chapter told us she had a church group of volunteers lined
w- SNEAKERS
`' up to help paint our homes. Those volunteers were even called the Holy Rollers. We
http ://www.ripoffreport. com/r/Habitat-for-HumanitylPayson-Arizona- 85 541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 4 of 17
AND CASH CARSON
NATIONWIDE al W nOt 6U rilSS WgRif%'&1g dM AMBti0 r} 7 f1 4ttI
EKNING! Click Here Now!
volunteers never did show up. Very few volunteers ever showed up to help on any
C Tr al Pure aspect of the home. There was a core group of 4-6 guys who showed up everyday to do
Garcinia
qf+ cambonia CLS construction, but those 4-6 guys were building 5 homes at one time, not 1 . You can only
- Garcinia Unfair imagine how hard those 4-6 guys volunteers worked to get 5 homes done at one time.
4. xst and misleadmg We can't praise them enough! As for why Habitat decided to make us paint our own
"free friar
practice Canoga homes at the last minute, we can only assume that Habitat upper management got in a
Park California bind, panicked a bit, and just decided it was easier to make the homeowners
vaells Famn responsible for painting their own homes. My wife spent weeks just priming and caulking
Bank Wells our home, that when it came time to paint, there was little time left. We did get a little
tis 30* e: Fargo, Wells
Famo The hank help from some Habitat volunteers, but it was minimal. The end result is our new Habitat
completely . home got a pretty bad paint job. There are massive runs in the paint, numerous spots
ripped me off that weren't painted where the primer shows through, and lots of unevenness in the
-- - numerous
times, taking hundreds of dollars in thickness of the paint. It's just a bad paint job. My wife and I thought we'd wait until after
fees with no neootaitions or humility ' we moved in and hire local painters to come finish painting the home (assuming it would
Ashland Oregon probably be an affordable job), but the paint job was done so poorly that a reputable
— Lift Serum Pro local painting service quoted us $1200.00 dollars to finish painting the home. That;• emu False
Er, , . adyedis painting company even laughed at how bad the paint job on the new home was. To put
miss puttied into perspective how difficult the painting was, by the time Habitat thrust the painting
pawnent plans, onto us, we were at the point of barely getting our 300 hours of Sweat Equity in by
Consumer rights and Intent In scam!
Internet closing day. Because we had to paint our own homes, and because my wife worked so
hard to get the painting done, we had over 500 hours of documented Sweat Equity by
Lanterra
Developments signing day. Ultimately, even though Habitat reduced our hours to 300, we still got 500
Toronto. Condo, hours in, in only 5 months. By making us paint our own homes, Habitat created an
Developer immense and unnecessa
Rios. Off. ( ry) amount of stress on our family. At the same time, that
> Buyers pride you are suppose to feel in getting a new Habitat home all but vanished. I may
Lanterra, sound ungrateful here, but when I look around my new home, especially at the paint on
Developments. ranter*
developments, Condominium. Fort the walls, it only brings out negative emotions towards Habitat. It adds injury to insult
York Blvd Toronto Ontario that Habitat made us paint our own homes, then had the tenacity to lie about the selling
Natural price and so many other aspects of the home. I have 2 questions to ask here. Is it
t} . t Suns normal for Habitat to force prospective homeowners to take on such a large task even if
i ' " herbal they have their Sweat Equity completed? While I don't want to sound like a needless
-- s supplements
vitamins complainer, when we partnered with Habitat it was only discussed that we needed to
hierbas nanirales, natural. holistic. fulfill a certain amount of Sweat Equity. It was never discussed that we were going to be
alternative Los Angeles California forced to finish any certain task on the home. Considering how busy of a family we
Thomas were, the painting on the home left a very bad taste in our mouths in regards to Habitat.
Maudeno, My 2nd question in connection with this is why couldn't Habitat secure more volunteers?
Attorney
Thomas D There's something to that question. We were led to believe by many former Habitat
MaprteuoTom volunteers that our local Habitat had burned bridges with so many prior volunteers that
Mauriello
Lawyer with they were having a hard time gaining new volunteers in our new town. This is an
Criminal Record San Clemente assumption that may not be true, but plenty of people have led us to believe this was/is
California the case.
f,.-. CarJohnnv.com
,� - Reviews By mid-November, we had fulfilled every Habitat requirement and were set to close on
the home. On top of qualifying for the home, performing all the Sweat Equity, and
nh y" "' attending all the mandatory classes, we also had to come up with a $2200.00
downpayment. In my opinion, Habitat shouldn't require any downpayment on a home.
MN/ car Johnny Car Coming up with $2200.00 dollars for a low income family of 5 like ours, who can't earn
forBuying tens you Don't till out the more than $24,600 a year is a lot of money. Many home loans, including Rural and FHA
form unless you want a million calls Y Y• Y 9
from car dealerships. Portland home loans pay 102% of the financing of a new home, including closing costs. It doesn't
Oregon make sense why a non-profit like Habitat needs so much money up front. I can only
assume it is to prove the seriousness in buying the home and the ability for that low
income homeowner to be able to pay. If you can make the downpayment I guess they
Ripoff Report In the Media assume you can pay the mortgage. It's not like they really need the downpayment
otherwise. Considering all the stress we had been through to fulfill every obligation, it
Ripoff Report on
a - CBS 19 never dawned on us things were only going to get worse. On signing day, Habitat had
all 5 of us families lined up to consecutively sign. We were the first family in line. I was
ready to buy our new $142,000 dollar home. My parents in Oklahoma were loaded up in
Ripo Re rod on a U-Haul to bring us some furniture, as living in the RV meant we owned few household
CBS 19 Global possessions. We sat down at the Title Company, a phone book thickness of paperwork
is P-• " Marketing Alliance
at was laid in front of us, and one of the first things we saw was that our new home wasn't
$142,000 dollars as promised, but rather $175,000 dollars. What? Where did $175,000
Ripoff ReWn on
/ ,i ABC 15 - Smart dollars come from? I took a step back immediately. ! questioned the Executive Board
Shopper Member on hand and asked him where that price came from. He did a good job playing
dumb. I told him that we were told the homes were selling for $142,000, but he said little
Ripoff Report - Girls In response. He basically just asked if we were going to sign or not. I have to mention
x % Gone wild that this Board Member is the same guy who months earlier answered my question
directly that we might be upside down in our new Habitat home at the $142,000 dollar
selling price. In that meeting I asked 5 key Habitat Board Members about the $142,000
.-- - , Ripon Report on Fox dollar selling price, and they never once corrected me by saying the selling price was
ii - Car Repair
$175,000. In those same educational meetings another Executive Board Member went
` over the selling price of the home. He told us the first mortgage equaled $92,000, the
2nd mortgage equaled $35,000 (government grant), the third mortgage equaled
See more videos I $15,000 (another government grant), and that Executive Board member clearly told us
(when he brought up the 4th mortgage), not to worry about the 4th mortgage because it
I had no monetary value. Well if the 4th mortgage had no monetary value, then the
Special Features first 3 mortgages do add up to $142,000 which equals the selling price we were told. We
had no reason to think otherwise. Now that we were at the This Company signing for a
Doctored Reviews is designed to
help patients, doctors, and websites $175,000 dollar home, we found out that the 4th mortgage did have a monetary value.
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 85541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 5 of 17
Th f gn�t�r 2 u 11P 8OBVA�RrP9etf{9ugTeAr t%BRNAMd4?1894 v nYi c! Click Here Now!
'Dn �� � selling price $175,000. Now I must ask why Habitat hid the $175,000 dollar selling price
octored us for the entire 5 months leading up to signing on the home? They had every
Reviews opportunity to provide us with the real selling price. It cannot be an accident that they
forgot to tell us it $175,000. Why did other people within the Habitat organization think
What patients don't know the selling price was $142,000 too? Multiple other volunteers told us they were told by
Why Medical Justice's an Habitat upper management that the homes were selling for $142,000. How could a non-
understartd the problems created by profit organization that focuses solely on selling low income homes get the selling price
Medical Justice. a company trying to ' of 5 new condos so wrong? Something isn't right here.
restrict online patient reviews. arid to
offer some ways that let patients Habitat had our backs against a wall. We paid the $2200.00 downpayment. We had
freely talk about their healthcare spent 5 months stressing over fulfilling Habitat's requirements, our parents had spent
experiences.
thousands to bring us a house full of furniture, and we had no time to work with. We had
to sign for the home, or all was lost. We signed for the home with the intent that we
would get to the bottom of these indiscretions later.
DEMOCRACY
ISFORPEOPLE . I started asking everyone I could about the selling price of the home. I was told by
* *-* * * * * another Habitat volunteer that Habitat bases the selling price of the home off an
appraisal. That volunteer is a prominent contractor in my community. He told me he felt
The government should serve our home wouldn't appraise for more than $90,000-$100,000 dollars let alone $175,000
voters not corporate special dollars and that there wasn't a member of Habitat's Board who could agree those
interests. Public Citizen works to
empower ordinary citizens, reduce homes were actually worth $175,000. He encouraged me to pursue the selling price, so
the influence of bin corporations on we did. The first thing we needed to see was the appraisal in which the selling price was
government. open the government requests based. Well, Habitat ignored our ts for the appraisal for about 6 weeks. My wife
to public scrutiny and hold public 9 q PP out wee y
officials accountable for their asked the Executive Director over and over to give us the appraisal, and the Director
misdeeds, gave us every excuse in the book why she couldn't. After 6 weeks of trying we had to go
around the Director and ask a higher up volunteer. That volunteer got us the appraisal
immediately. The appraisal was a dandy. It was a one year old appraisal for a condo in
Phase 1 of the complex. Habitat sold the Phase 1 condos for $175,000 dollars too.
A What made the appraisal so interesting is that the appraisal used 3 homes from the
same condo complex to determine the value of that Phase 1 home. The homes that
were used to create the value of the low income condo were all within the nicest condo
NEL
complex in our community. That appraisal used the highest end condo complex to
WHAT you Need TO Now determine the value of low income condos. That's like going to a Porsche dealership to
ABOUT THE BBB' NOT a get an invoice to determine the price of a Kia. At the same time, once my wife and I
government agency as listed to Your : went back and re-read Habitats Homeowners Manual (the same manual that was
Neal phone book. Instead the BBB discussed in those mandatory educational meetings), the manual stated that upon the
is a private nonprorrt I franchise
operation. 20/20 exposes the BBB, completion of the construction of our homes, Habitat would hire an appraiser to get a
Harms Terror Group Gets 'A• Patina recent appraisal on our specific home, and that recent appraisal would determine the
- BBB is running a °pay for play"
scheme selling price of our home. Well now, simple enough, except that Habitat didn't follow its
own rules. Habitat didn't get a new appraisal, Habitat used an old appraisal for a
different address than ours. Because the housing market is so volatile, the price of a
home in 2008 would have been a lot higher than the price of a home in 2009. When I
asked Habitat why they didn't get the appraisal, they first came back saying that the
al
appraisal they used was valid, and there were no problems in using it (except that using
an old appraisal for a different address contradicts what is written in Habitat's rules
7tISFi1SSBS manual), then Habitat proceeded to lie and tell me that in an Executive Board meeting
receive ra Habitat Board Members voted not to get a new appraisal as to save us homeowners the
cost of the appraisal. What? That doesn't make sense. I knew when Habitat told this
Complaints. blatant mis-truth, they had no clue that I would go straight to the appraiser and ask him.
When I asked the appraiser, he said that he had done appraisals for Habitat for years,
and that he did them for free (no charge). He went on to say that his appraisal for Phase
1 of the condo complex was never meant to be used for Phase 2 and that he waited for
Habitat to call him in to do a (free) Phase 2 appraisal, but since Habitat never called
him, he assumed they used a different appraiser. He went on to then say that the price
of our Phase 2 home in 2009 would have been a lot less than than the Phase 1 home in
2008 since home prices were dropping so much. Habitat has yet to respond to me in
Gaza
t -1 F r r regards to the information I have collected on the appraisal. Instead of tackling my
{help
keep this site complaint head on that Habitat didn't disclose the true selling price of the home, and that
keep they didn't follow a specific rule (get a new appraisal upon the completion of the
construction of my home), Habitat just demonizes me, discredits me, and serves me
with an Injunction. Yes the Executive Director of the Payson Area Habitat for Humanity
took the time to go down to the local courthouse to file an Injunction against a
homeowner who was unveiling lots of wrong doings within the organization. That was
E/goat Ratan Cop..' .4* their way of taking care of me. Send a Constable to my store, serve me up, scare, me
and hope I shut the hell up. The Injunction must have been filed in hopes of scaring me
Ripoff Report Legal to get me to shut up, because it serves no other purpose otherwise.
Directory What makes this worse is that the Executive Board Member who was key in hiding the
true selling price of the home (the guy who looked me in the eye and said we would be
upside down at the $142,000 dollar selling price) has already left the organization. He
left immediately after we closed on our homes. Even worse is that Habitat currently
owns all the equity in our home (even though realistically there is upwards of $75,000
7"k. fl * dollars in negative equity in the home). It gets even more complicated because if I want
140144 * to sell my home, according to Habitat's Homeowners Manual, I have to give Habitat the
/ first right to buy back the home. When we go to sell the home, a new appraisal is
suppose to be done, and that appraisal determines the selling price of the home
(assuming its a normal appreciating housing market). Well now, if Habitat didn't get an
appraisal when they sold us the home, if we don't know the true value of the home when
we actually bought it, if housing prices have continued to drop since we bought the
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona-85541 /Habitat-for-Humanit. . . 1 /13/2014
Ripoff Report Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 6 of 17
Read how Rlpoff Report h0 I b r ,
��1>�4� ��i� ����t �����������ef�i�� I�sa�2SC,�fg�i�V1���AG! Click Here Now!
saves consumers millions. 22. Let's say that I went to Habitat to sell them back my home (you better believe I am
going to make certain they follow the rules if I did do this), and the new Board Members
decided to play by the rules, so they get a new appraisal, and that appraisal comes back
at $110,000 dollars. Is Habitat going to buy the home back for $65,000 less than they
sold it. It Is realistic that could happen. What if Habitat decides not to buy the home
back. That would be a worse scenario as I could never sell the home for $175,000 on
the open market. This is a good example of why it is/was so important for Habitat to
follow it's own rules and regulations. Habitat is in an even stranger bind because they
just started building Phase 3 of this condo complex. If the 5 new Phase 3 condos are
completed in one year, and housing prices drop further, Habitat has already been called
out by me for not getting a new appraisal. Let's assume they get a new appraisal for
Phase 3, and that appraisal comes back at $110,000 dollars. Well Habitat will be forced
to sell the homes for less than the first 3 mortgages (which might be a problem
considering the $50,000 in government grants involved). If this is the case, then Habitat
will be screwed every which way because Phase 3 homes will be sold for so much less,
while us Phase 2 homeowners got screwed because we didn't buy our homes for their
current market value on signing day. Habitat seems to have gotten themselves in a real
bind (all because they thought they were above the rules).
What makes this even more interesting is that between 2002-2006, when our local
Habitat chapter was selling only site built homes in middle class neighborhoods during
the Real Estate boom in my town, those homes were being sold for $125,000-$140,000
according to public records. Now how is it that the same Habitat could sell site built
homes during a housing boom for so much less than low income condos during a
housing crisis? Doesn't make sense does it? Something is really wrong with all of this.
My Habitat story and complaint is long I know. I am trying to get through it too. I'm sick
of typing, but there's so much to explain. Other problems we've had with buying our
Habitat home include the HOA that is attached to this condo complex. On top of paying
an exorbitant amount for the condo, Habitat is charging us $76.00 a month for HOA
fees. This is a new low income complex and the HOA fees are already $76.00 dollars a
month? At this rate, what will they be in 5-10 years? If you compare the HOA fees to our
income, this HOA is equivalent to costing us 1 out of every 25-dollars we earn. That's a
big part of our income, and I wholly believe Habitat could have kept the HOA fees a lot
lower. Where the HOA gets interesting is that during all those mandatory educational
meetings, Habitat really stressed how hard they were going to be in maintaining the
HOA rules. A big reason I agreed to buy a home in this condo complex was that I was
led to believe Habitat would properly maintain the HOA. Well now, after a year of living
in the complex, the HOA is complete chaos (and completely bogus). Habitat has ignored
most all HOA violations, and if we bring up a violation to the HOA Board, nothing gets
done. I've read other complaints against Habitat on this website where homeowners say
Habitat built their homes in known ghettos. The opposite is happening in my case.
Habitat took a piece of property right the middle of my town, built 9 condos, and for the
most part created a ghetto were nothing existed before. Calling my condo complex a
ghetto is a bit harsh, but my wife and I have endured a lot of drama over the first year of
living in the complex. One neighbor has had multiple bouts of domestic where her
boyfriend (a known drug addict) beat her up while she was pregnant with her child. We
were even told he crashed her car on purpose, flipping it off the road when she was on
her way to give birth (seriously). I hope that story isn't true, but we've heard it from
enough people that it is likely true (the Police have come the complex since looking for
him). It seems the cops come to our complex regularly as it is. We've had to endure
child neglect. One mother of multiple boys was arrested (we were told for threatening to
kill her ex-boyfriend), and after her arrest her boys were taken away. We haven't seen
those boys since. That morn won the home over another mom, so it is sad that mom is
now living in a Habitat home without her kids while her Habitat home has has turned into
quite a party house. We have had instances of vehicle damage by kids living in the
complex (kids throwing rocks is the biggest problem as 3 windows have been knocked
out). One Habitat Homeowner's dog got loose and attacked another homeowner's
young daughter (she was bitten pretty good). We even had one homeowner who went
months neglecting her dogs and not picking up the dog poop in her backyard. Animal
Control had to come out to leave a notice for that neighbor to pick up the poop. The list
could go on.
Habitat built these condos (14 condos total) with no parking for visitors. The parking is
out of control as well. We only get 2 parking spaces per home, yet some homeowners
use 3-4 spaces for their own cars (remembering there are only 2 extra spots for the
entire complex). Some neighbors regularly have multiple friends come over, and they
take up all of the spaces as well. Imagine paying $80.00 a month for an HOA you have
no control over, only to come home and have no place to park. It doesn't happen every
night, but it happens often enough. The trash is really out of control too. Some
homeowners walk to the dumpster and just throw their trash on the ground. The trash
spreads everywhere (seriously). It's an amazing mess. My wife and I have documented
all of these issues with many photos, yet when we send the photos to Habitat, Habitat
does little to resolve any HOA problems other than to try and demonize us as
troublemakers). Well I can say that out of the 5 Phase 2 homeowners, we are the only
couple who HASN'T had CPS or the Police come to their house.
At the same time, according to the HOA manual, and the CC&R's Habitat controls the
HOA til Phase 3 is completed and the majority of the condos are occupied. When we
http : //www .ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona-85541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 7 of 17
mer aitZi ft teatti8� t�a1¢?iN HCketn��f c�rfRaS0 Rana (W/W i ! Click Here Now!
maintenance and weed control. That was in Novem er of 2009. By June/July of 2010,
even though all of us homeowners were spending approximately $112.00 dollars a
month for weed control, no paid weed service had been hired to physically pull weeds.
The weeds were out of control. When we asked Habitat why they were charging us for
weed control and not controlling weeds, Habitat had to backtrack and go get a new
estimate for weed control (they had been taking our money for 9 months and hadn't
even hired a weed control company). They had nothing lined up by the middle of the
summer. In a letter we received on July 4th (after we complained about the weeds not
getting pulled), Habitat wrote they found a cheaper weed control company (it was
cheaper because they pulled 1/4th of the weeds in the complex), and Habitat also noted
we should get a refund for overpayment into the HOA in accordance with the weed
control. Well once again, Habitat doesn't follow through on what it says. At to the last
HOA meeting, Habitat claimed they had spent approximately $250.00-$300.00 on weed
control, yet the homeowners had paid $1000.00-$1200.00 dollars into the HOA just on
weed control (approximately $12.50 a month times 9 families for 1 year) if not more.
Even back in August, Habitat had a church group come pull weeds for FREE (though
Habitat bought them $250.00 dollars in ice cream - I think Habitat was mad that I found
out they bought that church group ice cream - I'm more connected in this town than they
give me credit for). I'd like to know if Habitat used our HOA money to buy the ice cream?
At the same time, when I asked about getting a refund for the overpayment on weed
control, Habitat told us that we needed to keep that money in the HOA to apply towards
painting the homes in the next 5 years (how does weed money go towards future paint
money). Another interesting fact is that according the HOA Manual, Habitat was
suppose to install landscaping at the complex within 90-days of us moving into our
homes. Well Phase 1 homeowners have lived in their homes for 2 years, and we've
been in our homes for 1 year, and no landscaping has been installed. When I asked
Habitat about the landscaping they used a lame excuse saying they couldn't install the
landscaping until Phase 3 of the complex was finished which is another 12-18 months
away (if not more). Why is it written in the HOA manual specifically, that the landscaping
would be installed within 90-days if Habitat had no intent to install it even in the first 3
years? It's ugly at the complex with no plants (though we have a bunch of weeds).
The story gets better. Habitat included a 2-year warranty on all of our homes. Habitat
has a whole section in the Homeowners Manual devoted to the warranty, and very
specific warranty rules to go along with it. Before my wife and I fully moved into our
home (November 20th of 2009), we had the construction committee come in to look at
some of the problems in the home. Those problems included bad flooring (2 different
colored carpets had been installed), almost immediately our linoleum was coming up,
there were bubbles all over the linoleum, our sinks leaked, our door knobs were loose,
there were exposed seems in the drywall, and the list could go on and on. 4 Habitat
Board Members came into our home, inspected it, said the problems needed to be
fixed, but they pretty much left it at that (didn't really fix the problems). The flooring
installers did come out and fix the mix-matched carpet, and the plumber did fix our
leaking sinks (though he told us over and over that our sinks are so cheap they are
always going to leak a little), but the majority of the problems were ignored. Habitat
states in its Homeowners Manual that we are suppose to call Habitat with any warranty
concerns. It goes on to say Habitat will call us back within 24-hours. 24-hours? Habitat
pretty much didn't call at all, and after we bugged the Executive Director enough (the
lady who filed the Injunction against me), she told us that we needed to call the
contractors and sub-contractors ourselves, and that it was not her job to call for us (well
that's not what the Homeowner's Manual states). the Director even gave us a list of
numbers to call. Since she was no help to us, we called the sub-contractors ourselves,
but oddly enough they never called us back. We called the flooring installers numerous,
numerous times and they never called us back. Well our warranty was for 2-years, but
after 1 -year, as a few new problems developed, we decided to file a formal complaint
against Habitat with the Arizona Registrar of Contractors. The Registrar didn't accept
our first complaint (because we didn't file it against an actual license number), but the
General Contractor on our house called us immediately to say he'd come out and fix all
of our problems promptly. That was great news. We'd already waited a year. The
Contractor told us he'd call us that same work week to come out and fix the issues. Well
one week turned into two and two turned into 3. Soon enough 6 weeks had passed, and
the Contractor never called us back. We felt one year and 6 weeks was more than
enough time, so we filed a 2nd complaint with the Registrar. The Registrar came out on
December 3rd, 2010 to do an inspection. The Contractor showed up for the inspection
(he didn't call us prior to that even though the Registrar encouraged him to), and my
wife, the Contractor, and the Registrar went over every complaint we had. After the
inspection, we waited a week to receive a Corrective Work Order from the State of
Arizona. The State gave the Contractor 15 days to fix a very specific list of problems.
The Contractor waited 11 days to come fix the problems. He didn't fix every problem on
the list, and the repair they did to the flooring was actually worse (no kidding). They
fixed the bubbling in our linoleum, where it was coming up at the edges, by gluing a
plastic molding to the floor (the linoleum wasn't glued down to begin with). Well after
supposedly repairing the floor, the plastic molding they glued down popped off, the
linoleum bubbled up even worse, and now we have exposed glue to look at (good work
guys). According to the Registrar, the State can charge the Contractor $500.00 dollars
for every repair not finished in time. Why would a licensed contractor risk thousands of
dollars in fees with a citation against his license over a Habitat for Humanity home
(especially when he is just beginning building 5 new Habitat homes)?
http ://www. ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona-85541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 8 of 17
They f4l� titlin1/8066'HPRli 0.RPTOPORRAelNicAhtfigtORONINGI Click Here Now!
hardworking, who is educated, who is well traveled, who has some real life experience,
what I gather Is that Habitat for Humanity is best suited to those people who will not
question authority or the way Habitat operates, and who will accept Habitat as an
organization that controls every aspect of home ownership. Considering Habitat
currently owns all the equity in the home they sold us for such a ridiculous price,
considering Habitat hasn't fully upheld the 2-year home warranty, considering we pay
$100.00 dollars a month in property taxes, considering we pay $76.00 dollars a month
for a silly HOA, considering so many things have gone wrong in the 5 homes Habitat
recently built (and my neighbors have worse warranty problems than we do, but for
whatever reason they won't make Habitat come out to fix those problems), the only
advantage I see to buying a Habitat home is that the mortgage is interest free. Other
than the interest free aspect, I see no advantage to buying a Habitat home. I pay around
$500.00 dollars a month for my Habitat condo. The monthly payment is great, and you
won't hear me complain about how cheap my mortgage is, but considering I currently
own no equity, considering my home has no equity, considering I am landlord and renter
all-in-one, I feel buying this Habitat home is a bad investment. I live in a low income
housing complex, and that feeling of being a proud homeowner does not realistically
exist. I have friends in my community who recently bought a home using Rural/FHA
financing. They bought a site built home in a nicer neighborhood than ours, for only
$100,000 dollars. Their mortgage is only about $150.00 dollars more a month than our
mortgage is, yet they own all the equity in their home. When they go to sell their home,
they have a real chance to put all the money they invest into the home back into their
pocket. With my Habitat home, I will get next to nothing back if I sell my home in the
next 5 years, which puts my home ownership on par with a renter who has no landlord
to fix any problems.
The last thing I want to mention in this complaint is that Habitat for Humanity seems to
be run by very, very well-to-do volunteers who were successful in their business
careers. The current President of our local Habitat chapter runs an Edward Jones
Investments firm. Habitat has no excuse for dropping the ball on so many of these
issues. This isn't a government organization. Habitat is a very successful non-profit.
Even though my family pays back on a cheap, interest free mortgage, it is no excuse for
Habitat not to follow it's own rules and regulations, doing things properly. I know the
people who run my local Habitat Chapter know better than to run a business like this.
Many of the Habitat volunteers who don't want to help uphold our Habitat HOA live in
half million to million dollar homes in elite golf course communities where their HOA
costs many hundreds of dollars a month. They know the ins and outs of HOA's, and I
know if their neighborhood had the issues our Habitat complex has had, they would be
screaming bloody murder. Its a true double standard. Why Habitat will not right the
wrongs I've listed in this complaint, yet take the time to file an Injunction against me, is
beyond comprehension. I am only guilty of being a loud mouth whistle blower exposing
the wrong doings of the Payson Area Habitat for Humanity.
At the same time, I would simply walk away from my Habitat home if it weren't for one
thing holding me back. Like every other first time home buyer in America for most of the
last 2 years, I took advantage of the $8,000.00 first time home buyer tax credit. We took
the $8,000 dollars and invested all of it into our store. That $8,000 dollars Is the only
reason our store survived 2010. At the same time, I feel the $8,000 dollar tax credit is
like a prison sentence forcing me to stay in an unpleasant situation. Since I am forced to
live in this Habitat home for 3-years, I am damn well going to speak up and uphold
Habitat to any wrong doings. Hopefully in the long run, my outspokenness will help cure
the Payson Area Habitat for Humanity against the ills it is currently operating under.
One last thing I also want to mention is that I filed a complaint with the Attorney General
in Arizona in July of 2010. I filed a complaint with Habitat International at the same time
too. I have contacted a dozen different media sources. I have spoken out, I've created
noise, yet I've gotten nowhere with my complaints. Not one media source ever called
me back. Habitat International had the nerve to tell me they saw no wrong doings. My
local Habitat Chapter responded to my Attorney General complaint by dodging my
complaints while trying to make me look like someone who was making up lies. Habitat
actually told the Attorney General that I was not an active participant with Habitat (well
then how did I earn any Sweat Equity at all if I wasn't participating?), and that I missed
many of the educational meetings that were held. These were blatant lies. What Habitat
failed to tell the Attorney General was that the meetings I missed took place before I
ever applied for my Habitat home, and that Habitat had to hold make up meetings to get
us up to par, and that I attended every meeting required once we were approved for our
home. Habitat even told the Attorney General they were foreclosing on our home
because we didn't pay $73. 13 of our mortgage. Habitat is going to foreclose on a home
because the homeowner didn't pay $73. 13? What Habitat failed to tell the Attorney
General was that the $73.13 I didn't pay was out of protest for Habitat not properly
maintaining the HOA (it should also be noted that I have a very credible credit record
with no bad marks against me - my credit Is In the low to mid 700's). I told Habitat I
would not pay another HOA fee until they provided me with a detailed account of the
HOA, because they were taking our money and not providing the services we were
paying for (weed control, grounds maintenance, landscaping, and upholding HOA
violations). I say this because my complaints can be substantiated and backed up
simply by reading Habitat's own Homeowner's Manual, yet Habitat only wants to
discredit me by saying I am the one making up lies and spreading nasty rumors against
them (politics in the good ole boys club at its best).
http ://www .ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 85 541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 9 of 17
wilnixffAsmfrogval (smyoat, TggINMI � eft ir�a�VecTigMkt 1 .t9 Click Here Now!
Director, and the Executive Board Member who is currently President of our HOA. Once
they resign I hope the Payson Area Habitat for Humanity will re-group, restructure, and
bring in a Board of Directors that will play by the rules, and who will put low income
people first. I also want the Injunction against me removed since it was made up of lies
as well. The Executive Director of my local Habitat blatantly lied in the Injunction saying
I was threatening my neighbors. I have never once threatened any neighbor. Why she
can file a court document with such a blatant lie is beyond me as well. I have contacted
upwards of a dozen attorneys, trying to find an attorney who will help me clear my
name, and once I have mentioned Habitat's name to those attorney's, they immediately
tell me they cannot help because it would be a conflict of interest. It's like Habitat is a
beast you cannot tame. There is no accountability. I hope someone reading this well
write me with a valid suggestion to help me uphold Habitat against any wrong doings.
If you want to read more about my Habitat story, you can go to my official website at
www.nohumanityformyhabitat.com
My wife just called and said the cops are at our complex again. I am still at work typing
this out. I can't wait to get home and find out what drama unfolded tonight at our Habitat
for Humanity condo complex.
This report was posted on Ripoff Report on 1230/2010 09:48 PM and is a permanent record located
here: http /Avww.ripoffreporfcom?rMabitat-for-HUmanity,Payson-Arizone-85541/Habitat-for-Humanily-
Payson-Area-Habitat-For-Humanity-The-Problems4ve-Encountered-Buyi-677104. The posting time
indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be
Mountain or Pacific depending on the time of year.
Ripoff Report has an exclusive license to this report. It may not be copied without the written permission
of Ripoff Report.
Click Here to read other Ripoff Reports on Habitat for Humanity
Search for additional reports
If you would like to see more Rip-off Reports on this company/individual, search here:
Habitat for Humanity Search Search Tins
Report & Rebuttal
Respond to this Also a victim? Repair Your
report! Reputation!
File a Rebuttal [ File a Report . Get started
Arbitrate
Remove Reports?
No! Better vet! Arbitrate to set the record straight!
REBUTTALS & REPLIES:
Updates & Rebuttals 3 5 0
Author Consumer Employee/Owner
#1 Consumer Comment
to the person who said HFH has to pay
lawyers . . .
AUTHOR: Dee - (USA)
SUBMITTED: Saturday. July 14, 2012
HFH has many lawyers who work with the organization, so I don't know how much of
an issue that would be for them. Its the homeowners who most likely would not be
able to afford attorneys for representation.
Respond to this report! File a Rebuttal
#2 Author of original report
End Result
AUTHOR: Me Who - (USA)
SUBMITTED: Sunday, May 06, 2012
To the last person who just responded, thank you for your response. My response
here isn't to be argumentative or negative. I am only responding because it's been
awhile since I have responded to any of the posts on here, and I wanted to set the
record straight a little more.
As for saying that lawsuits cause you and Habitat to have to spend more money,
there is no lawsuit on my end. I am not suing Habitat, so no worries there. As for
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona-85541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report j Habitat for Humanity Complaint Review
ahPayson, Arizona: 677104 Page 10 of 17
1041l�i Tara 1t{�Rean12�g3�filVUU'lot"t=' ��� Nfal t" tfvps ietlt�VCwiRrinG! Click Here Now!
bono attorneys. I know my local abitat had attorneys who worked for free to help
them. If I sued Habitat, it would cost me a lot more money then it would Habitat, and
it would be almost impossible to win against them. I'd be dumb to sue Habitat,
but when Habitat for Humanity's take money and don't provide the services they
are charging their homeowners for, then someone needs to speak up.
If you have had good luck in dealing with your local Habitat, that is great but you
can't group all Habitat for Humanity's together as a whole. Each local Habitat for
Humanity is its own entity. While they operate under the Habitat International
umbrella, they are not fully governed by Habitat International. Because of that, each
individual local Habitat for Humanity operates a little differently. I may be wrong, but I
talked extensively to Habitat International about my problems. I also talked to other
Habitat affiliates in other towns across Arizona. What Habitat International told me is
that they have no control over what my local Habitat was doing. What the other
Habitat's told me is that a lot of the issues I was having would not be issues in those
other Arizona towns simply because those other Habitat entities don't operate in the
same exact manner as my local Habitat does.
Since I posted this Report, and since my last response on this page I have put
Habitat behind me. I gave Habitat their home back and I walked away. My walking
away was me partially giving up, but it was also because the situation was bad, and
it was a situation my family didn't deserve to be in. I deleted the website I built and
listed above because I want to put Habitat behind me, team from it, and forge a
happier future for my wife and kids (which we are doing).
You have to remember that my local Habitat came to us asking my wife and I for
months to apply for a home. My local Habitat branch in Arizona couldn't find enough
families to qualify for the homes they were building. It took me 9 months to finally
give in and apply for a Habitat home. Habitat promised us so many things through
the approval process, but when we finally moved into our home the reality was very
different. We didn't receive many of the services we were paying our hard earned
money for.
What Habitat promised us was not he said/she said type of stuff. Habitat had very
specific rules and regulations written into their homeowner's manuals and HOA
manuals they made us sign and agree to. We paid money to Habitat for specific
services they weren't providing. Habitat is a business. My agreements with Habitat
were business related. If I paid for a service that was clearly written out in a Habitat
manual, don't I deserve to receive the service I paid for? Just because it's Habitat
you're telling me I should just turn a blind eye and let them take advantage of 14
homeowners?
The first homeowners in our Habitat complex moved into their homes in late 2008.
We moved into our homes in late 2009. The last homeowners moved in, in late
2011 . The down payment I made on my home included landscaping. Habitat
charged me up front for the landscaping around my home. Remember this is a
Habitat complex with 14 Habitat condos all lined up in a row. You probably live in an
individual Habitat home in a normal neighborhood. These Habitat condo complexes
popping up around the country are very different, and have very different problems
that arise when you group Habitat homeowners together. My Habitat complex had a
very strict HOA. By the end, I was paying 90.00 something dollars a month for that
HOA. 76.00 dollars went to the HOA, plus Habitat was charging a 15.00 dollar a
month maintenance fee charge.
After 24 months of living in my Habitat home, the landscaping hadn't been installed.
My Habitat HOA manual clearly stated that the landscaping was to be installed
within 60-days of moving into my home. Habitat installed the landscaping I paid for
after I moved out of the house, but it took Habitat 27 months to install something that
as far as my contractual agreement is concerned was to be installed within 60-days.
Is that right?
My local Habitat wasn't following through on the home warranty that was promised to
us when we bought the home. Habitat installed faulty water filtration systems in
almost every home. In my building, which includes 5 condos grouped together, at
least 4 of those condos have water filtration systems that leaked through the walls
into the living rooms of each home.
One of the Habitat homes flooded badly. When a water damage restoration
company was called to look at the water damage to that one Habitat home, it was
recommended by that company to rebuild the water damaged parts of that home.
Habitat turned down that request and told the company to basically do nothing.
In my specific circumstance, when our water filtration system leaked through the
walls of our home flooding part of our living room carpet, Habitat's response was to
send their plumber to our home where he completely removed the water filtration
system. I was mad when Habitat did that, and I asked them on numerous occasions
to re-install a fully functioning water filtration system. I paid for a house that had a
water filtration system. What right does Habitat have to sell me a home with a
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona-85 541 /Habitat-for-Humanit. . . 1 /13/2014
Ripoff Report 1 Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 11 of 17
filY/ti 'esXstgCl ana MPOIPPSs { cipPR f 8thia-MWR WR1RiCit! Click Here Now!
without replacing it or refunding us for the cost of it?
If you bought a new car under warranty and the AC went out in your new car, and if
you brought that car back to the dealership to have the AC repaired, only to have the
dealership completely remove the AC rather than fix it, wouldn't that constitute as
fraud? Why would it be any different in my case just because its Habitat? Habitat
needs to act in a fair and ethical manner just like any for-profit business needs to.
Like I mentioned before, Habitat was charging us for weed control, yet no weed
control was being done. No weed company was being hired on a regular basis to do
weed control. If you were paying your hard earned money for weed control, and it
wasn't being done, wouldn't you speak up to? I wasn't responsible for my own weed
control because this was a condo complex, not an individual home. We were forced
to pay HOA fees that were suppose to cover these issues.
I could go on and on about more and more specific Habitat problems, but it's all in
the past now since I moved out of the home 4 months ago. What was worse were
the problems we faced with other Habitat homeowners in that complex. Our
problems with Habitat were never resolved, but more importantly we couldn't
continue to live in our condo solely based on the legal problems we encountered
with many of our neighbors. These weren't problems where-as we couldn't get along
with our neighbors. These were problems where-as our neighbors kept getting in
trouble with the law, and we had to live next to their problems.
We witnessed child abuse in that complex, child neglect, even child molestation. I
can't tell you how many times the Police came to our complex. I am not making this
up. One Habitat mom's boyfriend was beating her and her son. He was arrested and
got 10 years in prison for his crimes. He was convicted last year. My wife was
subpoenaed by the State in that case to testify against the boyfriend because my
wife was home when the boyfriend beat up our neighbor (that neighbor ran to our
home to beg my wife to call 911 ). That boyfriend reached a plea with the State, so
my wife wasn't forced to go to court. His plea included a 10-year prison sentence.
As for the child neglect, one of our Habitat neighbors was a single mom with 5 kids.
For a few months in a row during the summer of 2010, that mom would leave every
night to go party at the bar, leaving her 5 young kids at home alone. She was
arrested in August of 2010, and once the Police discovered the child neglect her
boys were removed from the home. She lost custody of all 5 kids, and the state even
took away her visitation rights. She followed that up by having another kid.
SERIOUSLY!
As for the molestation, 2 adolescent Habitat boys were caught molesting a 5 year
old boy on 4-5 occasions. The state got involved in that case too, even calling us to
see if we had witnessed any of those incidents (which we hadn't). The sex and drugs
were overwhelming too. The mom who lost custody of her 5 boys would bring
numerous different men to her home and you could hear the sex going on, on a
regular basis. Our immediate neighbors yelled and screamed at each other all the
time, and we'd clearly hear their fighting through the walls of our home. Living in that
complex was bad. The people Habitat chose to live in those condos had a lot of
problems, and it seemed their problems escalated once we all moved into the
condos.
We had to get out of there simply because we didn't want to live in a ghetto. Ever
since moving out, it has been a huge weight off our shoulders. Life is so much better
beyond Habitat. I am sorry I ever partnered with Habitat, but it definitely was a true
life learning experience.
All the Best!
Respond to this report! I File a Rebuttal l
#3 Consumer Comment
fellow american
AUTHOR: Shame on you - (United States of America)
SUBMITTED: Friday, May 04 , 2012
if anyone is to point fingers it should be to the complainers. everyone of us
take crap from someone or place on a everyday basis. do we complain about
or object to everything? no, we don't. we weight them out to choose the most
important, then go for it.
i have read this complaint & you seem to have valid points. but really, why
don't you spend your time worrying about your community & how habitat can
& would help you & your business instead of making them have to charge more
because of lawyer fees they have to pay because of your complaints.
http ://www .ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 85541 /Habitat-for-Humanit . . . 1 /13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 12 of 17
Is there a Ripoff Re Dort about you! ? SEO Reputation Management WARNING! Click Here Now!
Habitat has been a blessing to me & my children when i was single & still a
blessing now that i am married. somethings i don't agree with sometimes
about habitat for humanity but i can say 99.9 percent of the time i have no
problem with what they do or how they do it.
how's this, you the prosecutors get sued, because of you & your law suits it
has made it hard now for the rest of us 99.9 percent have to pay more.
we receive some money from your law suits to pay the difference
of upping the cost due to your lawsuits????? your a smart person, do the
right thing & stop this.
sincerely,
your fellow american, tax payer, business owner & humanitarian.
Report Attachments :
EGO -�
DYL .vuwrt
SEAL art
rcvwrt
SUCCESS -*Oflflrt
JEALOUSY .anuran
KNOWLEDGE -ucuart
CONFIDENCE -mart
Respond to this report! File a Rebuttal
#4 UPDATE EX-employee responds
This is standard habitat operations
AUTHOR: Critical Thinker - (United Stales of America)
SUBMITTED: Wednesday. June 22. 2011
What is described here are Habitat operations as usual. I worked as a full-time
volunteer/construction lead/board member and operations director for a short time
fora small dysfunctional affiliate.
Habitat runs on the theory that volunteers can build quality houses, worthy of market
value.
The reality is that most of the homes are shoddily built, basic protocol of business
and construction operations is often loose or non-existent as the branches are most
often run by volunteers -- and any warm body is considered an asset.
There are large affiliates that are doing it right, such as in the south in the Katrina
region and in large urban areas. But unfortunately, in smaller cities and towns,
these branches or "affiliates" as Habitat calls them, run pretty on their own as
independent organizations that carry the Habitat name and follow a loosely policed
(if at all) set of guidelines handed out by the Habitat International -- the umbrella
organization that supposedly oversees and supports the affiliates.
In reality, affiliates exist as dysfunctional organizations that barely meet the housing
needs of their region, if at all. They satisfy their requirement to send a portion of
their earnings (on mortgages) to the International mother organization and they then
left alone.
Habitat International and separate affiliates have suffered numerous claims against
them for negligence in building, negligence in safety -- causing serious injury and
death to volunteers. Habitat is founded on a good mission, but unfortunately the
emphasis on volunteer-run operations and build operations in order to meet the low
threshold of build cost required to offer the low monthly payment and no interest
loans to homeowners means that quality of product, safety and professionalism fly
out the window.
Getting involved with a small affiliate can become a nightmare for anyone who
expects professionalism, responsibility and consistency in practice. With the high
turnover of volunteers, the often lack of having requirements for skilisets specific to
managing a construction company, mortgage company and small business, most
Habitats fail miserably in delivering the goods as promised.
Also, most Habitat board members and volunteers tend to harbor a holier than thou
attitude, pumped up as they are by the righteousness of their mission, outside
criticism is scoffed at or ignored outright. They tend to feel that they are not bound
by normal accepted rules of professionalism in operations and thus will often be
loathe to take responsibility for their actions or even to see the error in their ways.
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 85541 /Habitat-for-Humanit . . . 1 /13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 13 of 17
I Inign9Wilg ii4'sa68Ric4809 WrePONI a{ itabi Rj fit t PWWING! Click Here Now!
with Habitat to consider the idea carefully. Examine the operations of the affiliate, do
they have a professional paid staff to oversee daily operations and do they have a
separate paid staff to oversee construction? Is the board made up of professionals
who have experience In the legal, real estate or construction fields? Ask about their
other projects, meet past homeowners and ask them about their experience, the
quality of their new home and how the experience was for them from beginning to
end.
Worse is that many volunteers and home owners are left to feel out in the cold when
they have a problem or complaint. When the system of denial is in full effect,
resolving problems in a timely fashion often becomes the least important goal -- as
this requires an interest in improvement of operations and systems. Since many
Habitat affiliates align their work with godliness, they tend to immediately rationalize
their difficulties and blame overly demanding or non-compliant behavior as the
reason for volunteers or service recipients having problems.
This also extends to the behavior toward those volunteers who suffer injury on the
site. I saw with my own eyes, on many sites, blatant violations of accepted safety
standards in the industry. As a professional contractor, I am very well aware of the
high level of risk related to the activity of construction and serious accidents that can
result, including loss of life.
Habitat volunteers have been permanently crippled and some have died on jobsites.
Most often these accidents are due to a failure to follow accepted rules of safety,
other time it is because the chance of injury increases exponentially with the risk of
the activity involved. In other words, even the best laid plans can go awry and
accidents will happen. Construction is rated as one of the most dangerous jobs in
the country.
Volunteers are mandated to sign a waiver before they are allowed on a construction
site. This waiver indemnifies and holds the affiliate harmless in the case of
accidents. Many affiliates have coldly followed this waiver rule to the letter -- literally
blaming the victim of an accident and failing to follow up with proper care and filing a
claim. Habitat does have insurance to cover volunteers in the case of serious
accidents, but the culture at Habitat is to not necessarily avoid accidents -- but to
ride on the language of the waiver and deny even the most egregious victims and
families of victims the relief they deserve.
Again, proceed with caution as Habitat, while having a noble cause and mission
formulated by a very idealistic and respectable founder, Millard Fuller, unfortunately
has decided that production of houses for the benefit of the fundraising operations
and profit of the greater International organization is more important than providing
just, caring and proper service to their mission.
I would recommend highly that anyone with a problem with Habitat who is not
receiving relief from the affiliate they've dealt with, immediately look for legal
representation and file for relief with the courts -- oh and don't assume that you can
go it alone for large losses -- they have attorneys working for them who will fight
tooth and nail to not release a dollar.
Respond to this report! File a Rebuttal J
#5 Author of original report
Update On This Story !
AUTHOR: Me Who - (USA)
SUBMITTED: Thursday. February 2d, 2011
I see the last rebuttal on this report states that someone is willing to bet there is a lot
more to this story. There is always more to a story, and with a story like this, there is
another side to the story as well. The Payson Area Habitat for Humanity has their
side of the story!
When I wrote this report, I didn't have an opportunity to write it out, edit it, proof read
it, re-edit it, and so on. I had to write it out in one sitting, which took a considerable
amount of time. I realize in re-reading my own story that I was in a hurry, that I didn't
write as coherent of a story as I would have liked, and that a lot of my story was as
much rant as factual detail. What I wrote is true from my perspective, but I would
have liked to have been able to proof read and edit this article a few times before
submitting it. Since I can't go back and edit my original text, it is what it is.
I don't know if the folks at the Payson Area Habitat for Humanity know I posted this
report. I haven't told them.
My problems with Habitat have hardly improved since I originally posted this report. I
can say that the Arizona Registrar of Contractors did force Habitats General
http : //www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 85 541 /Habitat-for-Humanit. . . 1 / 13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 14 of 17
gegic@q% tRrysi otl(' �4i Y snn1 RmisNrtmgPF N RING! Click Here Now
Contractor too 2 months longer t an the Registrar's original due date to fix those
problems.
At the same time, the water filtration system in one of the Habitat condos two doors
down from us burst last week, and flooded the entire downstairs of our neighbors
home. We were told that neighbor wasn't home, so there is a good chance that
water was pouring into our neighbors home for a whole day or two. You can only
assume a flood that bad has to affect the neighbors on both sides of that condo
since they all share walls.
The water filtration system in the condo next door to us was leaking too, and it
leaked into the walls and living room of our next-door neighbors home.
The water filtration system in our home was leaking into our living room too, and the
condo on the far end of our complex had a leaky filtration system as well, but we
don't know if it flooded into the home. We can confirm that 4 out of the 5 condos in
our building have had leaking water filtration systems. Out of those 4 condos, at
least 2 of them had water leak into the living room, and the one condo in the middle
flooded throughout the entire downstairs from what we were told.
It can't be good in the long run to have water leaking into the walls of brand new
condos that are barely a year old. We have to be worried about mold now!
On another note, my wife and I received a letter from Habitat today. Two and a half
weeks ago (February 7th, 2011 ) my wife and I submitted another complaint letter to
Habitat stating many of the problems we've encountered over the last year and a
half. We've submitted many letters stating our concerns and our complaints, but it
seemed like those complaints never got us anywhere, other than being demonized
by the top 2 people in the organization.
Something changed today. The certified letter my wife and I received was an offer
for Habitat to buy our home back from us. At the same time, the letter stated that the
Executive Director of the Payson Area Habitat for Humanity has resigned. The
Executive Director was the only paid position in the organization (other than a couple
of employees at the Re-Store). For the Executive Director of the Payson Area
Habitat for Humanity to resign over many of the complications listed above in this
report proves that much of what we said is valid. I never thought she would resign
over all of this, so my wife and I are just blown away at the news.
As for Habitats offer to buy us out, that is another surprise. Not once have we ever
gone to Habitat asking to leave or be bought out. All we ever asked was for Habitat
to do what it said it would do (especially in consideration of what was written in all of
Habitat's rules and regulations manuals). We asked Habitat to be honest, to provide
us with the services they were charging us for, and to help provide us with a safe
and comfortable place to live and raise our children.
Habitat still hasn't fully addressed our issues. Instead they just want to buy us out.
Adding onto this that we received a letter stating the Executive Director has resigned
is proof that there is a lot more to this story and a lot of validity in it.
Respond to this report! File a Rebuttal
#6 Consumer Comment
More to the story
AUTHOR: Ramjet - (U.S.A.)
SUBMITTED: Saturday, February 05, 2011
I am willing to bet that there is a LOT more to this story!
Respond to this report! I File a Rebuttal
#7 Consumer Comment
I had an HFH home once myself
AUTHOR: Dee - (USA)
SUBMITTED: Saturday, February 055, 2011
Payson, I would be pleased to post on your website as I have posted here. I would
like to tell my own story - but I'm still trying to figure out WHERE to begin! I found my
local chapter to be very disorganized, and I would be so confused sometimes from
the mixed communications. I found it hard to deal with the organization also because
many of the employees would speak to me on a personal level instead of a business
level - except when it suited them. I will admit that I became unemployed for an
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona- 85 541 /Habitat-for-Humanit. . . 1 /13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 15 of 17
Vin8P lR .%Rft cl Nt9upPI$ § 9 IStWfKih dScjH RNING! Click Here Now!
position elimination, and then a month later I was badly injured in a car accident and
could not work for a long time. It was then that I realized that 'no interest' apparently
means no disability or unemployment insurance to cover the payments. I contacted
the E.D. at that time and asked if I should move out. I had two young children, no
child support, and I did not want to be unexpectedly evicted. He told me that I would
be granted forbearance on the loan, and I could start paying mortgage again when I
became employed. Four months later when I said that I'd been to countless
interviews, but had not landed a permanent position, he said, "You mean to tell me
you haven't found a job YET???" I was taking temp assignments to pay my utility
bills, and the long-term assignments never lasted because sooner or later I would
have to call in sick, or take time off to attend physical therapy sessions. Again, I
asked if I should move, and once again the E.D. said he'd get back to me. Then I got
a notice calling the whole loan due. My mother offered to make two of the payments
with her credit card if it would keep me in the house. I was told that they could not
take credit card payments over the phone, so my mother bought a Greyhound bus
ticket so that she could come and pay the amount in person. The E.D. assured us
before she arrived that this would be sufficient. As soon as my mother left, I got
another notice calling the loan due once again. I called and asked, what about the
payments my mother had made? The E.D. said that he had met with the board
AFTER receiving the payment, and this was not acceptable. But he had said
beforehand that it WOULD be acceptable. I said, so you lied about that. He started
yelling at me, saying that I should have a job by now, etc, etc. I told my mother what
had happened, and she was very upset, saying that she could have used the money
to send bus tickets for me and my children. This is just the tip of the iceberg.
In all honesty, I have been much happier since I sold that house and found a nice
house to rent. The place I've been living in is MUCH bigger than the HFH house. I
have had my current full time job for five years now, and I have never missed a
month's rent. When something needs to be fixed, I can call the owner, who is very
prompt and honors our lease agreement. I have only had to call the owner six times
in the four years I've been here, and only two of those calls required having to wait
for service calls from outside agencies. I can not begin to tell you the all the troubles
I had with my HFH house - from day onel
For the record, about a month after I moved out of HFH house, I drove by and saw
that my neighbor (also an HFH home owner) had moved out as well. I have known
at least three other folks who closed on their houses and then vacated.
Perhaps there are folks whose home ownership worked out well. I was not one of
them. I would like to let others know what they would be getting into with them
before they decide to apply for and purchase a home. It's not just putting in sweat
equity, making your monthly payments and keeping your yard cut. You can become
temporarily disabled as I did, or you could wind up with costly repair and
maintenance issues.
Respond to this report! File a Rebuttal j
#8 Author of original report
Something More I Want To Add To My
Story !
AUTHOR: Me Who - (USA)
SUBMITTED: Friday. December 31 , 2010
I wanted to add this to my original story. When that first bout of domestic violence
happened in our Habitat specific condo complex (a female Habitat homeowner was
beaten up while pregnant by her drug addict boyfriend - that single mom ran out of
her home into our home, escaping the boyfriend, begging my wife to call 911 ), I
emailed our local Habitat Chapter immediately. The Executive Director of the
Payson Area Habitat for Humanity emailed me back thanking me for letting them
know this domestic violence was happening in the complex. Her thanking led me to
believe I could go to Habitat with these types of problems, and it also led me to
believe Habitat wanted to know what was going on. During this same time frame,
other problems were occuring, most notably the 5 year old boy who lived next door
to us was out of control. He was being allowed to play outside unsupervised (even
months later after all the drama, this boy is still sometimes outside by himself). The
boy is destructive. He broke out the rear sliding glass door in his mom's home. He
broke out both windows in his mom's car (seriously), and he cracked the window of
another Habitat homeowner's SUV. The boy would race his bicycle, scooter,
skateboard up and down the sidewalk regularly crashing into all of the homeowners
vehicles. Other kids were racing their bicycles up and down the sidewalks too
screaming and hollering, and I feared that my vehicle was going to be regularly
damaged by all these unsupervised kids (plus the noise was overwhelming at times
and the HOA was suppose to prevent this type of thing from happening). That 5 year
old boy would also chase cars into the street, he'd ride his bike out by the street near
traffic, all unsupervised. We feared for his safety! That boy would also throw temper
http : //www.ripoffreport. com/rlHabitat-for-Humanity/Payson-Arizona- 85541 /Habitat-for-Humanit. . . 1 /13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 16 of 17
t1 1 ri g' a '� svettr Pn@AA* igeMeTrtilnii RitEIf ff199JWR MING! Click Here Now!
hood and roof (seriously). His mom would come out screaming at him. The boy
would sometimes run into our home escaping his mom. It was a bad situation, and I
didn't know how to deal with it. I emailed Habitat. In that email I was very specific
about these issues. I also complained about some very specific HOA violations, and
I asked Habitat what could be done to make the sidewalk in front of the homes off
limits to bicycles, skateboards, etc. etc. In that email I told Habitat that I was trying to
keep good relations with my neighbors, and I also mentioned that if I have a
complaint, I will bring a solution to the table. After I emailed Habitat about these
problems, Habitat never emailed me back. I waited a week or two, then emailed
Habitat again. Maybe I should have called, but I prefer to communicate via email
rather than phone calls. Once again Habitat never responded to our letter about the
HOA problems. A few weeks later, our neighbor's boyfriend confronted my wife while
I was at work. He told my wife that Habitat had called the mom next door in for a
private meeting. Actually I don't think it was Habitat, but rather the Executive Director
who did this on her own. The Executive Director never contacted me or my wife to
discuss anything, but she called my neighbor into her office, and from what we were
told, she read our PRIVATE emails to our neighbors. I feel this was done on purpose
to win our reputations in the complex. I feel Habitat (or rather the Executive Director)
did this to turn our neighbors against us. It worked because our neighbors definitely
turned against us. It's amazing that moms who can't control their kids, moms who
were bringing drug addict boyfriends into the Habitat complex, moms who were
neglecting their kids were almost being praised or felt sorry for in a way that
demonized us as bad people speaking out against our neighbors. Habitat failed to
tell my neighbors that I wrote I was trying to keep good relations with my neighbors.
My complaint here is that I emailed Habitat privately trying to find solutions to some
very difficult problems. Instead of communicating with us to help us with those
interpersonal neighbor dramas, Habitat violated our privacy and read our PRIVATE
emails to Habitat directly to our neighbor. What makes it worse is that those emails
were sent from my wife's email address with my wife's name attached to it, yet when
Habitat read the emails to my neighbors, they said they came from me (the
husband), not mentioning my wife at all (my name was nowhere on those emails as I
have my own email address). It was obvious Habitat was trying to ruin my reputation
since I was the one discovering all of these Habitat wrong doings. To give Habitat
the benefit of the doubt, if Habitat didn't want to be involved in neighborly drama's
(and I don't blame them if they didn't want to be), couldn't they have just said that
they can't get involved at this point, and left it at that. The fact Habitat (the Executive
Director) went so far out of her way to read our emails to our neighbors proves that
she had a vendetta against us (me) (this Is the same woman who filed the Injunction
against me). What I am curious to know is whether Habitat violated a privacy clause
by revealing private information like this. When we didn't pay the $73. 13 of our
mortgage out of protest for the HOA, Habitat disclosed that we weren't paying our
mortgage in full to our neighbors too. How I know this is we had some drama with
another neighbor over the fact she wasn't picking up her dog poop, while she was
also leaving multiple (and I mean multiple) bags of trash sitting on her front porch for
days on end (not taking the trash to the dumpster). We documented these issues
with photos, and sent those photos to Habitat (it was a Habitat Executive Board
Member who told us to take photos for documentation). That neighbor was livid that
we were complaining and turning her in for all the dog poop (and when I say dog
poop I mean every inch of her small backyard was covered in poop - there was no
way her two small dogs could walk in the yard without stepping in their own poop - it
was the type of yard you expect to see on Animal Cops) and all the trash. That
neighbor sent a friend of hers into my store to tell me to quit harassing her. We
never even once talked to her, so there was no harassment. We just told the
President of our HOA about these issues, and the HOA Board told us to call Animal
Control (which we did). Considering we hadn't had any verbal communication with
this mom, the only harassment that occurred was her sending her male friend in to
my store to tell me to stop harassing her. When that friend of the hers came in my
store, he tried to discredit me by saying I wasn't even paying my mortgage. It's
amazing how protesting a bad HOA, by not paying a $73.13 HOA fee (which with
Habitat is part of your mortgage - and not a separate payment like most HOA's are)
can be used against you in so many ways. Regardless, the only way that guy knew I
hadn't paid my HOA fee was because Habitat was disclosing personal information
about homeowners to other homeowners (that male friend and I had a good talk,
and I think he was blown away to hear all I had to say, his demeanor towards me
changed once we talked, and he even shook my hand as he left). The most
ridiculous aspect of the dog poop story is that my wife and I did what HABITAT told
us to do. We complained to the HOA first, but the Habitat employees controlling the
HOA told us to call Animal Control. Animal Control left a notice forcing my neighbor
to pick up her dog poop (and I can't stress enough how bad the yard was). The
neighbor decided to get back at me by going down to the Police Station and filing a
FALSE (and potentially illegal) Police Report against me claiming I entered her back
yard and burglarized the inside of her home. She actually claimed I broke into her
home and burglarized. Yes, local Bike Shop owner and Habitat homeowner breaks
into other Habitat homeowners home - Story at 10! The truth is I never once entered
that neighbors yard. She filed that false report out of spite, and I think this mom told
Habitat I was harassing her (even though I had never once spoken with her in
person), and I believe Habitat believed her, so to get back at me, and take up for the
http ://www.ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona-85541 /Habitat-for-Humanit. . . 1 /13/2014
Ripoff Report I Habitat for Humanity Complaint Review Payson, Arizona: 677104 Page 17 of 17
rc9 ml fll o4I ��( eta g�i
� 9 § � pR( c{rlv( {Zcki 2NING! Click Here Now!
against me.
Habitat has been disclosing private info between us homeowners since day 1 .
Habitat has told my wife and I lots of things about our neighbors that we were better
off not knowing. I have to say that I've learned a lot about my neighbors over the last
year too, and I've been guilty of discussing those things with other people too. Even
though I have been guilty of saying too much, I am a frustrated Habitat homeowner. I
am not a non-profit organization operating by strict guidelines and policies (Habitat
should strive to keep private information private without disclosing information that
would potentially turn Habitat homeowner against Habitat homeowner). I am curious
if this breach of privacy violates any kind of Privacy Policy within Habitat? What
would Habitat have to gain by turning neighbor against neighbor like this? We
complained to everyone within Habitat about the violation of our PRIVACY. Most
people agreed it was wrong for the Executive Director to do this to us, but no one
seemed to do anything about it. Even when we complained about these issues to
the PRESIDENT of the Payson Area Habitat for Humanity, his response was
this Habitat for Humanity is a mortgage company, we are like your bank. You
do not go to your bank with your HOA or personal problems, so you shouldn't be
coming to us with these issues too. Well now, maybe the PRESIDENT needs to re-
read the HOA Manual because in the CC&R's it clearly states Habitat has control of
the HOA til Phase 3 is finished. At the same time, Habitat hand picked all these
families to live in this complex. They should damn well know what's going on in
hopes that Habitat could be a positive mediator. Considering the President, Vice
President and Secretary/Treasurer of our HOA are all Habitat Board Members and
Employees (not Habitat homeowners), it seems obvious Habitat has a lot of control
and power within the HOA.
My two cents is that Habitat thought they were creating a paradise when they came
up with the idea to build these 14 condos. These 14 condos are Ground Zero in our
community. They exist at the busiest neighborhood intersection in our town. Once
Habitat had 9 families living in this complex it became evident that putting 9 Habitat
homeowners into tight living conditions proved to be more dramatic than ever
thought possible. Habitat probably never thought the complex would have the legal
problems it has had with the domestic violence, drug addict boyfriends, arrests, child
neglect, animal neglect, dog bites, etc. etc (not to mention the overwhelming amount
of HOA violations). Habitat really has no clue how to deal with all of this. I feel their
little Habitat paradise has gone downhill almost immediately. One Habitat volunteer
and Board Member told me personally that this condo complex is proving to be a
bad idea, and that Habitat was a lot better off building site built homes in various
neighborhoods. I agree with that volunteer. I am compassionate towards Habitat
having a good idea when the condo complex first came about, but now that the
condo complex is 2/3rds occupied, and now that there have been so many problems
in the first year, why would Habitat react to these issues by playing sides, turning
neighbor against neighbor, and playing good cop/bad cop. I guess it proves an
organization like Habitat, with such a good business model, is only as good as the
people who are running it, and that's why I would like to see the immediate
resignation of those top 3 people within the Payson Area Habitat that I mentioned
before. Our local Habitat use to be run by a local church pastor. We need a guy like
that to come back in and clean this organization up.
Respond to this report! ( Fite a Rebuttal
Report & Rebuttal
Respond to this Also a victim? Repair Your
report! Reputation!
( File a . Rebuttal.. j File a Report j Get Started (
Arbitrate
Remove Reports?
No! Better vet! Arbitrate to set the record straight!
i R�i�I l loading
Do i em. Close
Hanle 1 File a Report 1 Consumer Resources 1 Search 1 Link to Ripoff Report I Customer Support for Technical Issues l General Questions and Suggestions
IPrivacy Policy 1 Terms of Service I FAQ I About Us ( Why Rice Report will not release author Informatgn! I
llde I Thank YouEmails! l Corporate Advocacy Program: How to repair vour business reputation. 1 EdManedson - RipoffReport Founder l
r I Want to sue Ripoff Report? 1 Donate to our Legal Defense I BadBusinessBureau.com
„ Noon Copyright 01990-2014, Ripoff Report. AU rights reserved.
http ://www .ripoffreport. com/r/Habitat-for-Humanity/Payson-Arizona-85541 /Habitat-for-Humanit. . . 1 / 13/2014
Community Development IDownsizing the Federal Government Page 1 of 12
Home About Blog Federal Policy Basics Spending Charts Multimedia Cato Institute
INST1TU FE r
THE FEDERAL GOVERNMENT
yr
Community Development earch
Print
{I PDF
by Tad DeHaven
June 2009
Overview
Background
Community Development Block Grants
Affordable Housing Grants
Homeless Assistance Grants
Housing for Persons with AIDs
Self- Help Homeownership Grants
Rural Subsidies
Overview
During most of the nation 's history, there was little fiscal interaction between the federal
government and local units of government. The federal government had a limited set of
responsibilities, and most governmental functions were left to the states . Local governments
were subsidized and regulated by state governments, but generally not by the federal
government.
That structure changed dramatically during the mid- 20th century as the federal government
launched an array of housing , urban renewal, and community development efforts . It was a
grand experiment to use the seemingly vast resources of the federal government to try to
micromanage the life of cities and neighborhoods . The experiment was a grand failure, as
illustrated by the many public housing projects that became plagued with crime and
disorder.
In recent years, some housing and welfare programs have been reformed , but the federal
government still funds an array of "community development" activities for local
governments . Community development funds were originally targeted to large cities in
decline, but today funding is spread widely to communities rich and poor, large and small .
In 2009, the Department of Housing and Urban Development spent $ 13 . 2 billion through its
Office of Community Planning and Development. ) Here are the main programs :
• Community Development Block Grants. This $8 billion program provides formula- based
grants to localities for a range of development projects such as parking lots, museums,
and street repairs .
• HOME Housing Program . This $2 . 3 billion program provides formula - based grants for
"affordable" housing .
• Home less Assistance Grants. This $ 1 . 6 billion program funds local governments and
nonprofit groups that offer assistance to the homeless .
• Housing for Persons with AIDS. This $ 289 million program provides housing assistance for
low- income persons with HIV/AIDS .
• Self-Help Homeownership Grants. This $ 50 million program provides grants to nonprofit
groups that build low- income housing . The beneficiaries provide "sweat equity" by
contributing labor toward the construction of their homes .
• Rural Subsidies. This $24 million program funds a wide range of projects in rural areas .
http ://www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 2 of 12
According to HUD, community development programs : Federal Departments
Agriculture
Seek to develop viable communities by promoting integae approaches that
o m
provide decent housing , a suitable living environment, an ex an anded economic
opportunities for low- and moderate- income personspe Veprimary means
towards this end is the development of partnershioVtin all levels of
government and the private sector, including foot and nonprofit
organizations . ' Health and Human Services
Housing and Urban
That description sounds warm and fuzzy, but the reality is thatRQ filili i11@iUevelopment
programs have a history of wasteful and ineffective spending . Timeline
Further Reading
Following a background discussion , six HUD community develogfigg { ns are
examined . Some common themes in the workings of these profiwigaiccregnplexity,
bureaucracy, and susceptibility to financial abuses . Policymakepmriey..Ii gasilgtNyftpO
efforts at micromanaging local affairs, and leave community &„3i lit to local
governments and the private sector. Housing Finance and the
2008 Financial Crisis
Community Development
Background
Interior
The Constitution provided the federal government with a modest array of enumerated
powers and left most government responsibilities to the stateshEuoring most of the nation 's
history, local units of government were not financially tied to tle9fR12feafljd 'ernment. The
New Deal of the 1930s started to change that with major federaal h 'dr 1%nt into formerly
state and local policy areas . The federal government's micromPalferefaRflgffocal affairs
accelerated in the 1960s with President Lyndon Johnson 's "Great Society" and the creation of
the Department of Housing and Urban Development in 1965 .
Proponents of federal intervention claimed that state and local governments did not have the
capacity to address urban blight, affordable housing , and economic development. That led to
the launching of a huge range of urban grant programs, which President Johnson believed
would create "cities of spacious beauty and living promise. i3 New aid programs were created
for housing , urban renewal , education, and many other activities .
There were more grant programs enacted during the Johnson administration in just over six
years than in all of the preceding years in U . S . history combined . 4 There were 109 separate
aid programs for state and local governments enacted in 1965 alone. s President Johnson
called his policies "creative federalism, " but his activism dealt a severe blow to the
federalism of the nation 's Founders . By the end of the 1960s, many policymakers believed
that the federal government should spend money on just about any local activity that it
wanted , and questions regarding constitutional propriety were seldom considered .
With all the new federal subsidy programs came a blanket of regulations on the activities of
state and local governments . By the 1970s, state and local politicians were chafing at
Washington's heavy- handed approach . The Nixon administration pursued changes that
would allow for funding to be delivered with fewer strings attached under broader "block"
grants . In 1974, Congress enacted Community Development Block Grants . Under block
grants, local policymakers are afforded wider discretion regarding how to spend federal
money, but the federal government is still supposed to maintain oversight to prevent waste
and abuse .
The idealistic plans of the 1960s for federal aid to solve local problems have not panned out.
Federal meddling has been high in taxpayer cost and low on accomplishment. Indeed ,
federal subsidies and regulations have often contributed to the very urban decay that federal
involvement was supposed to fix . The following six HUD programs should be high on the list
of programs for federal policymakers to put on the chopping block.
Community Development Block Grants
Community Development Block Grants are the largest community development activity in
HUD . They were created by the Housing and Community Development Act of 1974, which
combined several narrower grants into one formula -based block grant for local governments .
http ://www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 3 of 12
The change stemmed from local frustrations with the complex Oettiliarganiataal aid that
developed in the 1960s . 6
Homeland Security
In 2009, CDBG spending totaled $8 billion . ' The bulk (70 percent) of the funding goes to
selected local governments that are called "entitlement communities . " The top five recipients
of these funds since 2000 are the cities of New York ( $ 1 . 6 billion ) , Chicago ( $ 780 million ) ,
Los Angeles ( $758 million ) , Philadelphia ($ 557 million ) , and Detroit ( $412 million) . $ The
other 30 percent of CDBG funding goes to state governments as "nonentitlement
community" funding . State governments dole out those funds to local governments and
nonprofit groups .
CDBG activities are supposed to meet one of three objectives : ( 1 ) benefit low- and moderate
- income persons, ( 2) prevent or eliminate slums or blight, or (3 ) address a serious need or
threat that has particular urgency . 9 A huge range of activities meet these criteria, including :
• acquisition of property
• construction or repair of streets, recreation facilities, and other public works
• demolition and rehabilitation of public and private buildings
• public services and planning activities
• assistance to nonprofit and for- profit groups for community development purposes
While CDBG funds are initially handed out to state and local governments, the ultimate
beneficiaries are usually private businesses and organizations working on particular projects,
such as shopping malls, parking lots, museums, colleges, theaters, swimming pools, and
auditoriums . Here is a small sampling of projects funded in 2008 : 10
• $ 588,000 for a marina in Alexandria , Lousiana
• $ 245, 000 for the expansion of an art museum in Allentown , Pennsylvania
• $ 147 , 000 for a canopy walk at the Atlanta Botanical Gardens in Georgia
• $ 196, 000 for expanding the Calvin Coolidge State historic site in Vermont
• $294, 000 for a community recreational facility in New Haven , Connecticut
• $ 196, 000 for the construction of an auditorium in Casper, Wyoming
• $441 , 000 to replace a county exposition center in Umatilla , Oregon
• $ 98,000 for the Pearl Fincher Museum of Fine Arts in Spring , Texas
• $ 245,000 for renovations to awnings at a historical market in Roanoke, Virginia
• $ 294,000 for the development of an educational program at the Houston Zoo in Texas
All these activities are purely local in nature, and there is no national interest in funding
them . CDBG funding runs completely counter to the federalist model of American
government.
Federal policymakers are supposed to make decisions on national issues such as defense and
security ; it makes no sense for them to be city planners, but that's what the CDBG program
effectively lets them do .
Battling over Formulas
Moving funding for local projects up to the federal level injects federal politics into local
activities . The particular cities and counties that receive CDBG funding have long been
fought over in Congress . While the program was created to help high - poverty areas improve
basic services such as fire and police, the program currently spreads taxpayer largesse very
widely, including to some of the wealthiest areas of the country. 11
CDBG money is doled out based on complex formulas that do not target need very well . For
example, the wealthy community of Madison , Wisconsin, receives a CDBG allotment of a
similar size as low-income San Marcos , Texas, partly because a large group of temporarily
low- income college kids in Madison are included in the formula . !' The 2009 federal budget
noted that the CDBG "formula has not been updated in over 30 years and as a result, many
lower- income communities receive less assistance than wealthier communities. i13 Experts
http : //www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development j Downsizing the Federal Government Page 4 of 12
occasionally try to fix such problems, but those reforms are us&allpsbttlsked by politicians
benefiting from the status quo. F
� is almt
One allocation item in the CDBG formula is "housing built before • AI . ow did that
obscure item get into the CDBG formula ? The Northeast- Midwest Institute, which is a lobby
group for a regional group of states, got a member of Congress to insert it into legislation in
1977 in order to tilt aid toward older cities . 14 The Bush administration wanted to change this
formula item in 2006 because "many poor communities have torn down old, blighted
housing while affluent communities have rehabbed theirs, giving them a leg up in the
distribution of funds . i15 But the Bush proposal met stiff resistance from wealthier
communities such as Oak Park, Illinois, which would have lost some of its CDBG subsidies . 16
CDBG spending has gradually shifted from poorer to wealthier communities over time . 17 For
that reason , the Bush administration rated the CDBG program "ineffective" due to its "weak
targeting of funds . i1° It noted , for example, that wealthy Greenwich , Connecticut, received
five times more funding per low- income resident than poorer Camden , New Jersey . 19 It
should not be the role of the federal government to redistribute income between regions, but
even if it was, the CDBG program is not very good at it.
Excessive Bureaucracy
One result of involving all three levels of government in funding local projects is rampant
bureaucracy . Local governments that receive CDBG funds spend 17 percent on
administration , on average, according to the Government Accountability Office . 20 For the
portion of CDBG funds that flow to state governments, state- level bureaucracies are an
additional cost. The GAO found that state government administration consumed 8 percent of
CDBG funds . On top of those costs are federal administration costs, which are about 5
percent of the value of grants . 21
After the government bureaucracies take their share, CDBG monies get distributed to the
private businesses and organizations that carry out funded projects . Federal rules usually
specify the share of funding that may be used by recipients for administrative costs, and 10
percent seems to be common . Thus, considering all the administrative costs at all layers of
government and private organizations, a large share of the CDBG budget disappears before
any actual work is done .
One cause of high administration costs in grant programs is that governments and private
groups must comply with complex federal regulations . Consider, for example, that the State
of Virginia 's CDBG manual explaining the regulations is 170 pages long , and the state' s
application package for grant applicants is 132 pages long . 22
Waste and Abuse
Moving funding for local projects up to the federal level eliminates responsible city planning .
When local funds are used for local projects, local officials have an interest in ensuring that
the benefits of public projects outweigh the costs . But when the federal government is the
source of funds, local governments tend to invest in a range of inefficient and wasteful
activities .
The CDBG program also has a history of financial abuse and dubious project spending . In
2006, HUD's inspector general found that fraud by CDBG grant recipients was common —and
increasing . 23 After recently auditing a sample of just 35 CDBG grantees, investigators found
more than $ 100 million in improper or questionable spending, including :
• An audit of redevelopment projects in San Diego found that $ 12 . 9 million was spent on
activities there were ineligible or lacked proper records . For example, CDBG funds were
used improperly for a festival to celebrate a shopping center. 24
• The City of Chicopee, Massachusetts, spent $4 . 3 million on projects that were ineligible
or lacked proper records . Some of the funds went to the affluent neighborhood where the
mayor lived . In 2005, the mayor was arrested on extortion charges related to illegal
campaign contributions received in return for helping a developer obtain development
funds . 25
http ://www. downsizinggovernment. org/hud/community-development 1 / 13/2014
Community Development I Downsizing the Federal Government Page 5 of 12
• The City of Utica , New York, spent funds on a variety of improper uses, such as $902, 799
on a marina and $ 255, 158 on ski chalet renovations . 26 That is not the targeting of funds
to poor neighborhoods that CDBG supporters envisioned .
In 2006 , HUD's inspector general reported that in just two and a half years of CDBG
investigations it had "indicted 159 individuals, caused administrative actions against 143
individuals , had 5 civil actions, 39 personnel actions, and over $ 120 million in recoveries. i27
The inspector general found that there were " repeated " problems with the program,
including the improper use of funds, grantee inability to account for funds, and a lack of
monitoring and oversight.
Here is a sampling of some of the local - level scandals to hit the CDBG program over the
years :
• The economic development agency of Essex County, New Jersey, spent $ 1 . 6 million on
county administration in assisting just seven businesses . 28
• A government employee in East St. Louis pled guilty to income tax evasion after directing
$ 158, 000 in CDBG funds to her bank account. 29 East St. Louis has long had corruption
problems with federal grant monies .
• Former South Dakota governor Bill Janklow directed $825 , 000 of CDBG funds to a
shooting range, which HUD ruled was an improper use of funds . 30 HUD found that 9 of 12
CDGB awards it examined in the state failed to meet low-income targeting requirements .
• Miami officials used CDBG funds to back a $5 . 4 million low- interest loan for an
investment company controlled by a wealthy Saudi Arabian sheik. 31
• Selected audits of CDBG grantees in 1995 produced 31 indictments and 21 convictions
for misuse of funds . 32 Auditors found that the owner of a Louisiana sawmill used funds to
pay off personal debts, the city of Troy, New York used $ 1 . 6 million to lure a hockey
team to the city, and a California Indian tribe used $404,000 to construct an off-track
betting facility.
• The head of the Multicultural Center in Modesto, California , who was a Democratic Party
activist, used $47 , 500 of CDBG money for personal and political purposes . 33
• The government of Washington , DC, gave $ 1 million to a funeral home for a business
expansion , which ended up never occurring . That prompted the Washington Times to
note : "It's an example of a repeated problem the city has administering its community
development block grants . "34
• Niagara Falls and Lockport, New York, used $ 12 million to build an amusement center,
which shut down after just six months of operation . The company behind the project pled
guilty to defrauding HUD . 35
The CDBG program has been a poster child for waste and abuse for decades. Unfortunately,
few members of Congress have shown any interest in cutting the program or even
conducting oversight. A 1989 news article explains why :
GAO investigators have been trying to interest congressmen in scrutinizing the
$ 3 billion Community Development Block Grant program . . . . Describing the
program as the " next bombshell " waiting to hit HUD, investigators said it is rife
with waste and mismanagement, but they got no takers . Lawmakers explained
that since they had been struggling to save the grants from Reagan 's budget
ax, they would be embarrassed by a scandal . In addition , many districts get
money from the program , and legislators do not want to launch a probe that
could turn off the spigot. 36
Despite all the abuses, perhaps policymakers believe that CDBGs are nonetheless effective
at stimulating growth . After 30 years and more than $ 100 billion it should be easy to
demonstrate the program 's success, but it's hard to find any examples of city rejuvenation
created by the program . 37 Instead , numerous cities, such as Detroit, which have been major
CDBG recipients, have fallen further into decline . The reality is that no amount of federal
money can overcome the local hurdles to growth in cities such as Detroit— including political
corruption and destructive tax and regulatory policies . Indeed , just like international
development aid , federal aid to the cities likely increases corruption and stalls much - needed
local reforms .
http ://www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development ! Downsizing the Federal Government Page 6 of 12
With the federal government running huge deficits, it cannot a � M SAGE r RCM ME MO R::T!P.'Tr d
often wasteful local development projects . Community develo . t� •S �:w' 11w!�^ nd
only local leaders and businesses using their own funds can m . �1G .�iL:G(" i� vows
decisions on projects. By providing local leaders with handout ply
encourage them to make irresponsible decisions . At the same , 7 �. = � ; n
that federal politicians use local projects as political tools that � nd
economics . •.r=, f - c
Affordable Housing Grants
The HOME Investment Partnerships Program is a $2 . 3 billion block grant program
established by the National Affordable Housing Act of 1990 . It provides funding to state and
local governments to develop "affordable" housing for lower- income families . HOME funds
can be used for housing rehabilitation , assistance to homebuyers, rental construction , rental
assistance , and counseling services . 38
Funding recipients must match every dollar of HOME funds with 25 cents from nonfederal
sources . Recipients must also set aside 15 percent of their funding for housing development
activities in which nonprofit organizations are the owners, developers, or sponsors of the
housing . 39 A generous 10 percent of funds can be used for administrative costs .
In 2003, Congress added an American Dream Downpayment Initiative to HOME . It provides
down payment, closing costs, and rehabilitation aid to first-time homebuyers with modest
incomes .40 A 2006 GAO report concluded that " limitations of HUD's data did not allow us to
draw any conclusions about the program' s accomplishments . i41 The Obama administration
labeled the program "duplicative" and called for its elimination . "42
Here are some typical audit findings by the HUD inspector general on the HOME program :
• Of $ 10 . 5 million received by Fulton County, Georgia , $6 . 4 million involved questionable
usage . 43 For example, one group was loaned $ 244, 850 for a home-building project and
was then given another $220 ,000 to cover cost overruns . The group went into default
and the taxpayer money was never recouped .44
• Bridgeport, Connecticut's HOME program ran afoul of auditors, who found almost $ 1
million in " unsupported " spending and excessive costs of various sorts.45
• Some grants received by the Puerto Rico Department of Housing were unauditable due to
poor accounting , while others were for work not performed or for excessive costs . More
than $2 million of spending was " ineligible " or " unsupported . "46
• The city of Pontiac, Michigan , loaned a developer $ 1 . 4 million in HOME funds to construct
houses . The developer built shoddy homes and reneged on $367 , 000 owed to the
government. 47
Homeless Assistance Grants
In 2009, HUD spent $ 1 . 6 billion on homeless assistance grants, which were delivered
through a remarkably complex web of programs . The origin of these programs was the 1987
Stewart B . McKinney Homeless Assistance Act. 48 There are four separate homeless grant
programs, each with its own set of complicated rules : 49
• Emergency Shelter Grants. These are distributed to state and local governments, who
parcel the money out to local government agencies and nonprofit groups that provide
homeless services . Funding can be used for such items as emergency shelters, health
care, and rental and utility assistance . Up to 15 percent can be used for administrative
costs .
• Supportive Housing Program . These are competitively awarded grants to states, local
governments, public housing authorities, and nonprofit groups . Funds are to be used for
rehabilitation or construction of housing for the homeless, and for services such as health
care, counseling , and employment assistance .
http ://www . downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 7 of 12
• Shelter Plus Care Program. Grants are competitively award
✓ bpendirg ' Cut w :.
governments, and public housing authorities . Funds are int 21,r . -`
supportive services and rent subsidies for disabled and ho Plan 201 '
• Single Room Occupancy. These grants are competitively awarded to public housing
authorities and nonprofits . Funds are used to rehabilitate properties to create multiple
single- unit rooms to permanently house the homeless .
These grants have created a labyrinth of bureaucratic red tape. HUD has taken some steps
to streamline the administrative burden , but Congress has not moved on GAO reform
recommendations . Regarding these grants, the GAO noted , "overlapping regulations and
reporting requirements, as well as the unpredictability of the competitive grants,
appropriation levels, and varying lengths of the grant awards made it difficult to administer
these programs . "5°
HUD is not the only federal agency that has programs for the homeless . According to a 2002
GAO report, there are 50 federal programs administered by eight agencies that provide
services to the homeless . 51 But even if federal homeless programs could be streamlined , this
sort of spending is not a proper federal responsibility . It makes more sense for charitable
groups and churches to deal with the problem on a local basis . Funds emanating from
Washington pass through multiple layers of bureaucracy , which results in waste and
ineffectiveness . The following are a sampling of audit findings on these homeless grants by
HUD's inspector general :
• The city of Dallas homeless grants are so poorly administered that auditors proposed that
all federal funding be cut off. S2 Thousands of dollars were spent on ineligible activities,
including rental payments for vacant apartments and for drug traffickers . The city's
reports included math errors, inconsistencies, and other problems .53
• A California grantee providing housing services for the homeless could not document
$ 108, 853 in expenses . Auditors criticized the poor oversight by local officials . 54
• A New York City housing grantee had $ 1 . 7 million in unsupported expenses, meaning
that the organization had no records to account for charges to the government. 55
• A Chicago housing grantee was found to have $671 , 252 in unsupported expenses, and
had used grant money to purchase ineligible items such video games, audio systems,
digital cameras, party supplies, and maintenance on the director' s personal vehicle . 56
Housing for Persons with AIDs
The $289 million Housing Opportunities for Persons with AIDS program was established as
part of the National Affordable Housing Act of 1990. HOPWA makes grants to state and local
governments for housing assistance and support services that benefit low- income persons
with HIV/AIDS . About 90 percent of the funds are distributed by formula and 10 percent by
grant competition .
As usual , the formula grants have prompted political battles over the geographic distribution
of funding . The current formula uses the cumulative number of AIDS cases in an area , which
illogically includes individuals who have died . 57 The Bush administration tried to change the
formula , but Congress has resisted fixing it, presumably because some cities would lose out
in any change in the formula .
As with other HUD grants , the HOPWA program has been plagued by waste, fraud , and
abuse :
• The city of New Orleans gave a politically connected nonprofit group $ 1 . 3 million for a
housing project on which it had already spent $ 1 . 7 million of federal funds—with nothing
to show for it. The New Orleans Times-Picayune noted , "It' s hard to believe that such a
sum was poured into the complex's two squat, beige brick buildings . .. . Nearly every
window is broken , leaving the units completely open to the elements . i58 Much of the
grant money went toward six-figure salaries at the nonprofit group.
• The New York Post reported that New York City was using federal funds to place some of
its homeless AIDs patients in "glitzy" four-star hotels . S9
http ://www. downsizinggovemment . org/hud/community-development 1 /13/2014
Community Development i Downsizing the Federal Government Page 8 of 12
• A Washington, DC, nonprofit group "could not substantiate 'Federal Policy in
federal funds" (92 percent of the HOPWA funds that it recei '
\
inspector general.60 The inspector general found that the g �5• -' rant
dollars on cigarettes, movie tickets, and bingo games.
• The HUD inspector general found that a Virginia organization "could not substantiate how
it used $339,661 of$353,562 of grant funds it received from HUD under a Supportive
Housing Program renewal grant and a Housing Opportunities for Persons with AIDS
grant."61
Setf-Help Homeownership Grants
The Self-Help and Assisted Homeownership Opportunity Program provides grants to facilitate
"self-help" homeownership. It was established by the Housing Opportunity Program
Extension Act of 1996 and cost$50 million in 2009. Low-income homebuyers provide "sweat
equity" by contributing labor toward the construction of their homes. Up to 20 percent of
SHOP funds can be used for administration.
Only a small number of nonprofit groups receive SHOP funds, including Habitat for Humanity
and the ACORN Housing Corporation.62 The latter group is part of the Association of
Community Organizations for Reform Now, which is a left-wing political outfit known for
perpetrating vote fraud.63 As one columnist noted, ACORN "promotes a 1960s-bred agenda
of anti-capitalism, central planning, victimology, and government handouts to the poor.i64 In
recent years, ACORN has received more than $2.7 million in SHOP funds.65
It is disconcerting that taxpayer money is entrusted to an organization with a political
agenda diametrically opposed to taxpayer interests. But it is also disturbing that reputable
organizations, such as Habitat for Humanity,jeopardize their independence by subjecting
themselves to the political controls that come with government money. Habitat used to
eschew government handouts, as its founder believed that "the conventional welfare-state
approach to housing robs the poor of their dignity.i66 Habitat has recently received over
$118 million in SHOP funds.67
Rural Subsidies
The Rural Housing and Economic Development program was created by Congress in 1998.
The program, which cost$24 million in 2009, provides grants to nonprofit groups, Indian
tribes, and state and local governments.The eligible activities for federal funding are
broad—everything from developing strategic plans to the acquisition of land and buildings.68
The HUD inspector general noted that RHED was at high risk of awarding funds to groups
that are incapable of achieving their stated objectives.69 While no inspector general audits of
RHED grantees are currently available, it is probable that similar waste and abuse plagues it
as plagues other community development programs.
The Bush administration tried to terminate RHED, arguing that it"is duplicative, particularly
of programs provided through the U.S. Department of Agriculture, which manages a portfolio
of rural housing and economic development grants programs that vastly exceed HUD's RHED
program.i70 Indeed, there are hundreds of federal programs that provide subsidies to rural
America.71
The RHED program was created to subsidize rural America within a department created to
subsidize urban America. It illustrates the propensity of lawmakers to spread the benefits of
spending as broadly as possible to garner maximum congressional support. But community
development, whether urban or rural, is not something that the federal government ought to
be involved in.
1Budget of the U.S. Government, Fiscal Year 2010,Analytical Perspectives,Table 27-1. All
data are for fiscal years.
2 See www.hud.gov/offices/cpd/index.cfm.
http://www.downsizinggovernment.org/hud/community-development 1/13/2014
Community Development I Downsizing the Federal Government Page 9 of 12
3 Quoted in Steve Malanga , "America 's Worst Urban Program, " a Li - . .
Pei la rig
4 Ben Canada , " Federal Regulation of State and Local Govern . o ZS!; arZS ' t
Congressional Research Service, RL- 30705, February 19, 2003, p.
S Advisory Commission on Intergovernmental Relations, " Federal Regulation of State and
Local Governments : The Mixed Record of the 1980s/ July 1993 , p . vi .
6 For background on the creation of Community Development Block Grants, see Advisory
Commission on Intergovernmental Relations, "Community Development : The Workings of a
Federal - Local Block Grant, " March 1977, p . A- 57 .
7 The $8 billion figure represents outlays for the entire Community Development Fund . For
details , see Budget of the U. S. Government, Fiscal Year 2010, Appendix, pp . 581 -82 .
8 See www . usaspending . gov.
9 See www . hud . gov/offices/cpd/communitydevelopment/programs .
10 Taxpayers for Common Sense, " Fiscal Year 2008 Earmarks Database, " www . taxpayer. net.
11 Government Accountability Office, "Community Development Block Grants : Program
Offers Recipients Flexibility but Oversight Can Be Improved , " GAO-06-732, July 2006, p. 7 .
12 Eileen Norcross, George Mason University, (testimony before the Subcommittee on
Federal Financial Management, Government Information , and International Security of the
Senate Committee on Homeland Security and Government Affairs, June 29, 2006) .
13Budget of the U. S. Government, Fiscal Year 2009, Appendix, p . 553 .
14 Rochelle L. Standfield , "Playing Computer Politics with Local Aid Formulas, " in American
Intergovernmental Relations, ed . Laurence J . O'Toole (Washington : Congressional Quarterly,
1985) , p. 175 .
15 Paul Merrion , " Proposed Shift in Urban Grants Creates, Winners, Losers in IL, " Crain 's
Chicago Business, May 26, 2006 ,
16 Paul Merrion , " Proposed Shift in Urban Grants Creates, Winners, Losers in IL, " Crain 's
Chicago Business, May 26, 2006 .
17 Congressional Budget Office, " Budget Options, " February 2005, p . 142 .
18Budget of the U. S. Government, Fiscal Year 2005, " Program Assessment Rating Tool ,
Program Summaries, " p . 206 .
19 Government Accountability Office, "Opportunities for Oversight and Improved Use of
Taxpayer Funds : Examples from Selected GAO Work, " GAO-03- 1006, August 1 , 2003 , p . 232
20 Government Accountability Office, "Community Development Block Grants : Program
Offers Recipients Flexibility but Oversight Can Be Improved , " GAO-06-732 , July 2006, p. 13 .
21 This is a rough estimate from comparing total administration costs to total grants and
subsidies for the overall department.
22 See www . dhcd . virginia . gov/CD/CDBG/docs/2006Manual . pdf and
www . dhcd . virginia . gov/CD/CDBG/docs/2006_CompetitiveGrant_RFP. pdf.
23 " Fraud Grows in Urban Grant Program , " Washington in Brief, Washington Post, June 30,
2006, p . A5 .
24 See Department of Housing and Urban Development, Office of Inspector General , "The
City of San Diego, California , Did Not Administer Its Community Development Block Grant
http ://www . downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development 1Downsizing the Federal Government Page 10 of 12
Program in Accordance with HUD Requirements When Funding the Cityjgtgeypl@pment
Agency Projects, " 2009- LA- 1005, December 2008 .
25 See Department of Housing and Urban Development, Office o nisppectorbe erart hte
City of Chicopee, Massachusetts Did Not Properly Administer More than $4 . 3 Million in
Community Development Block Grant Funds, " 2008- BO- 1001 , November 7 , 2007 .
26 See Department of Housing and Urban Development, Office of Inspector General , "City of
Utica : Community Planning and Development Programs, " 2002 - NY- 1003, September 5,
2002 .
27 Kenneth M . Donohue, inspector general , Department of Housing and Urban Development
(testimony before the Subcommittee on Federal Financial Management, Government
Information , and International Security of the Senate Committee on Homeland Security and
Government Affairs, June 29, 2006) , p . 4.
28 Philip Read , " Economic Agency Taken to Task for Development Loans, " New Jersey Star-
Ledger, February 15, 2009, p . 37 .
29 Michael Shaw, " Embezzlement is Uncovered in Block Grants, " St. Louis Dispatch-Post,
November 4, 2005 , p . C5 .
30 Michael Moreland, " Misuse of HUD Funds Traced to Janklow's Office, " Native Voice, March
7 , 2004, p. 1 .
31 Michael Blood, " Miami Officials Take Heat for CDBG Project, " Associated Press, March 18,
1992 .
32 Penny Loeb, "Waste, Fraud , and Abuse, " U. S. News & World Report, March 27, 1995, p .
26 .
33 Alvie Lindsay, "City Wants Money Back From Multi -Cultural Center, " Modesto Bee,
December 21 , 1991 , p . 1 .
34 Chris Harvey, " HUD, DC Struggle to Correct Abuse of Block Grant Loans , " Washington
Times, October 22, 1991 , p . B3 .
35 Penny Loeb, "A Federal Housing Program and its History of Hits and Misses, " U. S. News &
World Report, March 29 , 1993 , p. 25 .
36 Steven V. Roberts and Joseph P . Shapiro, "The Howl of Congressional Watchdogs , " U. S.
News & World Report, September 11 , 1989, p . 24.
37 For a discussion , see Eileen Norcross, George Mason University ( testimony before the
Subcommittee on Federal Financial Management, Government Information , and
International Security of the Senate Committee on Homeland Security and Government
Affairs, June 29 , 2006) , p . 26 .
38 See www . hud . gov/offices/cpd/affordablehousing/programs/ home/index . cfm .
39 See www . hud . gov/offices/cpd/affordablehousing/programs/ home/topical/chdo. cfm .
40 See www . hud . gov/offices/cpd/affordablehousing/programs/ home/addi .
41 Government Accountability Office, "HUD Homeownership Programs : Data Limitations
Constrain Assessment of the American Dream Downpayment Initiative, " GAO-06-677 , June
2006, p . 3 .
42 Office of Management and Budget, A New Era of Responsibility (Washington : Government
Printing Office, 2009) , p . 75 .
http ://www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 11 of 12
43 Department of Housing and Urban Development, Office of Inspector General , " Fulton
County, Georgia , Lacked Adequate Controls Over Its HOME Program , " 2008-AT- 1006, March
7 , 2008 .
44 Alison Young, " Fulton Wasted HUD's Money, " Atlanta Journal-Constitution , November 16,
2008 .
45 Department of Housing and Urban Development, Office of Inspector General , "City of
Bridgeport : Home Investment Partnership Program , " 2003- BO- 1003 , May 16, 2003 .
46 Department of Housing and Urban Development, Office of Inspector General , " Puerto Rico
Department of Housing : State Home Investment Partnership Program , " 2003-AT- 1006, July
30, 2003 .
47 Department of Housing and Urban Development, Office of Inspector General , " Pontiac
Neighborhood Housing Services , Incorporated : Home Investment Partnership Program, "
2004-CH - 1004, May 5, 2004 .
48 The Stewart B . McKinney Homeless Assistance Act was renamed the McKinney-Vento Act
in 2000.
49 See www . hud . gov/offices/cpd/homeless/programs.
50 Government Accountability Office, " Homelessness : Consolidating HUD' s McKinney
Programs, " T- RCED-00- 187 , May 23 , 2000, p . 8 .
51 Government Accountability Office, " Homelessness : Improving Program Coordination and
Client Access to Programs, " GAO -02-485T, March 6, 2002, p. 12 .
52 Department of Housing and Urban Development, Office of Inspector General , "City of
Dallas : Continuum of Care Program , " 01 - FW-251 - 1002, December 13, 2000 .
53 Department of Housing and Urban Development, Office of Inspector General , "City of
Dallas : Continuum of Care Program , " 01 - FW- 251 - 1002, December 13, 2000, p . 9 .
54 Department of Housing and Urban Development, Office of Inspector General , "Institute for
U rban Research and Development, El Monte, California , Did Not Properly Administer Its
S upportive Housing Program Grants, " 2006- LA- 1015, July 19, 2006, p . 6 .
55 • Department of Housing and Urban Development, Office of Inspector General , "Safe
Space, Inc. : Housing Opportunities for Persons with Aids, grant no . NYHOO-0020 ; and
S upportive Housing Program, grant no . NY36B97 -0025 , New York, New York, " 2003- NY-
1802, July 24, 2003, p . 3 .
56 • Department of Housing and Urban Development, Office of Inspector General , " New
Phoenix Assistance Center, Chicago, Illinois, Substantially Failed to Manage Its Supportive
Housing Program Grants, " 2009- CH - 1001 , October, 24, 2008 .
57 See Government Accountability Office, " HIV/AIDS : Changes Needed to Improve the
Distribution of Ryan White CARE Act and Housing Funds, " GAO-06- 332, February 2006 .
58 Gordon Russell , 11 . 1 Million Spent, but Complex Still Rots, " New Orleans Times-Picayune,
May 16 , 2004, p . 1 .
59 Dan Mangan and Jessie Graham , "City Using Posh Hotels as AIDs Shelter, " New York Post,
April 11 , 2001 , p . 2 .
60 ▪ Department of Housing and Urban Development, Office of Inspector General , "Safe Haven
Outreach Ministry, Incorporated , Washington , DC, " 2004- PH - 1008 , June 3 , 2004 .
61 • Department of Housing and Urban Development, Office of Inspector General , " Peninsula
AIDS Foundation , Incorporated , Newport News, Virginia , " 2004- PH - 1006, May 17, 2004 .
http : //www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 12 of 12
62 , See www . hud . gov/offices/cpd/affordablehousing/programs/shop/index . cfm#grantees .
63 Elizabeth Williamson and Brody Mullins, " Democratic Ally Mobilizes in Housing Crunch , "
Wall Street Journal, July 31 , 2008 .
64 Sol Stern , "ACORN 's Nutty Regime for Cities, " City Journal, Spring 2003 , www . city-
journal . org .
65 See www . hud . gov/offices/cpd/affordablehousing/programs/shop/expenditure . pdf.
66 Howard Husock, America 's Trillion-Dollar Housing Mistake : The Failure of American
Housing Policy ( Chicago : Ivan R. Dee, 2003 ) , p . 117 .
67 See www . hud . gov/offices/cpd/affordablehousing/programs/shop/expenditure . pdf.
68 See www . hud . gov/offices/cpd/economicdevelopment/programs/rhed .
69 Department of Housing and Urban Development, Office of Inspector General , "Audit of
Management Controls over Grantee and Subgrantee Capacity, Community Planning and
Development, Washington , DC, " 2004- FW-0001 , June 18 , 2004, p . 15 .
70 Budget of the United States Government, Fiscal Year 2009, Appendix, p. 557 .
71 SRI International for the Federal Home Loan Bank of Des Moines, "Crafting a Competitive
Future, " April 2005, p. 45 .
Departments : Housing and Urban Development
Cato Institute
1000 Massachusetts Avenue N . W .
Washington D . C. 20001 - 5403
Telephone ( 202) 842-0200
contact@downsizinggovernment. org
http ://www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development IDownsizing the Federal Government Page 1 of 12
Home About Blog Federal Policy Basics Spending Charts Multimedia Cato Institute
lNSfITtT L
a , �r. : z ,. . ..LITHE FEDERAL {�1lERNMENT .
v
Imo:
Community Development earch
Print
D PDF
by Tad DeHaven
June 2009
Overview
Background
Community Development Block Grants
Affordable Housing Grants
H omeless Assistance Grants
H ousing for Persons with AIDs
Self- Help Homeownership Grants
Rural Subsidies
Overview
During most of the nation 's history, there was little fiscal interaction between the federal
government and local units of government . The federal government had a limited set of
responsibilities, and most governmental functions were left to the states . Local governments
were subsidized and regulated by state governments, but generally not by the federal
government.
That structure changed dramatically during the mid - 20th century as the federal government
launched an array of housing , urban renewal, and community development efforts . It was a
grand experiment to use the seemingly vast resources of the federal government to try to
micromanage the life of cities and neighborhoods . The experiment was a grand failure, as
illustrated by the many public housing projects that became plagued with crime and
disorder.
In recent years, some housing and welfare programs have been reformed , but the federal
government still funds an array of "community development" activities for local
governments . Community development funds were originally targeted to large cities in
decline, but today funding is spread widely to communities rich and poor, large and small .
In 2009, the Department of Housing and Urban Development spent $ 13 . 2 billion through its
Office of Community Planning and Development. l Here are the main programs :
• Community Development Block Grants. This $ 8 billion program provides formula- based
grants to localities for a range of development projects such as parking lots, museums,
and street repairs .
• HOME Housing Program . This $ 2. 3 billion program provides formula - based grants for
"affordable" housing .
• Homeless Assistance Grants. This $ 1 . 6 billion program funds local governments and
nonprofit groups that offer assistance to the homeless .
• Housing for Persons with AIDS. This $ 289 million program provides housing assistance for
low- income persons with HIV/AIDS .
• Self-Help Homeownership Grants . This $ 50 million program provides grants to nonprofit
groups that build low- income housing . The beneficiaries provide "sweat equity" by
contributing labor toward the construction of their homes .
• Rural Subsidies. This $24 million program funds a wide range of projects in rural areas .
http ://www . downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 2 of 12
According to HUD, community development programs : Federal Departments
Agriculture
Seek to develop viable communities by promoting integae approaches that
provide decent housing , a suitable living environment, and mex$aneded economic
opportunities for low- and moderate- income personspeVeprimary means
towards this end is the development of partnershirg-dWAR6 all levels of
government and the private sector, including foPiffira and nonprofit
organizations . ' Health and Human Services
Housing and Urban
That description sounds warm and fuzzy, but the reality is thatfttYfilillifilt3Intlevelopment
programs have a history of wasteful and ineffective spending . Timeline
Further Reading
Following a background discussion , six HUD community develogp{figggti{ ns are
examined . Some common themes in the workings of these proAwgdy ,griplexity,
bureaucracy, and susceptibility to financial abuses . PolicymakeNAlia girsAtWFMN
efforts at micromanaging local affairs , and leave community depit to local
governments and the private sector. Housing Finance and the
2008 Financial Crisis
Background Community Development
Interior
The Constitution provided the federal government with a modest array of enumerated
powers and left most government responsibilities to the statesh&orin most of the nation 's
history, local units of government were not financially tied to tl��cfgeeSPar 'ernment. The
New Deal of the 1930s started to change that with major federTal l r Mrent into formerly
state and local policy areas . The federal government's microm retafie hefcal affairs
accelerated in the 1960s with President Lyndon Johnson 's "Great Society" and the creation of
the Department of Housing and Urban Development in 1965 .
Proponents of federal intervention claimed that state and local governments did not have the
capacity to address urban blight, affordable housing , and economic development. That led to
the launching of a huge range of urban grant programs, which President Johnson believed
would create "cities of spacious beauty and living promise . i3 New aid programs were created
for housing , urban renewal , education, and many other activities .
There were more grant programs enacted during the Johnson administration in just over six
years than in all of the preceding years in U . S . history combined .' There were 109 separate
aid programs for state and local governments enacted in 1965 alone . s President Johnson
called his policies "creative federalism, " but his activism dealt a severe blow to the
federalism of the nation 's Founders . By the end of the 1960s, many policymakers believed
that the federal government should spend money on just about any local activity that it
wanted , and questions regarding constitutional propriety were seldom considered .
With all the new federal subsidy programs came a blanket of regulations on the activities of
state and local governments . By the 1970s, state and local politicians were chafing at
Washington 's heavy- handed approach . The Nixon administration pursued changes that
would allow for funding to be delivered with fewer strings attached under broader "block"
grants . In 1974, Congress enacted Community Development Block Grants . Under block
grants, local policymakers are afforded wider discretion regarding how to spend federal
money, but the federal government is still supposed to maintain oversight to prevent waste
and abuse .
The idealistic plans of the 1960s for federal aid to solve local problems have not panned out .
Federal meddling has been high in taxpayer cost and low on accomplishment. Indeed ,
federal subsidies and regulations have often contributed to the very urban decay that federal
involvement was supposed to fix . The following six HUD programs should be high on the list
of programs for federal policymakers to put on the chopping block.
Community Development Block Grants
Community Development Block Grants are the largest community development activity in
HUD . They were created by the Housing and Community Development Act of 1974, which
combined several narrower grants into one formula - based block grant for local governments .
http ://www. downsizinggovernment. org/hud/community-development 1 / 13/2014
Community Development I Downsizing the Federal Government Page 3 of 12
The change stemmed from local frustrations with the complex Oetiatigagiawal aid that
developed in the 1960s .6 Homeland Security
In 2009, CDBG spending totaled $8 billion / The bulk ( 70 percent) of the funding goes to
selected local governments that are called "entitlement communities . " The top five recipients
of these funds since 2000 are the cities of New York ( $ 1 . 6 billion) , Chicago ($780 million ) ,
Los Angeles ($ 758 million ) , Philadelphia ( $ 557 million ) , and Detroit ( $412 million) . 8 The
other 30 percent of CDBG funding goes to state governments as " nonentitlement
community" funding . State governments dole out those funds to local governments and
nonprofit groups .
CDBG activities are supposed to meet one of three objectives : ( 1 ) benefit low- and moderate
- income persons, ( 2) prevent or eliminate slums or blight, or (3 ) address a serious need or
threat that has particular urgency .9 A huge range of activities meet these criteria , including :
• acquisition of property
• construction or repair of streets, recreation facilities, and other public works
• demolition and rehabilitation of public and private buildings
• public services and planning activities
• assistance to nonprofit and for- profit groups for community development purposes
While CDBG funds are initially handed out to state and local governments, the ultimate
beneficiaries are usually private businesses and organizations working on particular projects,
such as shopping malls, parking lots, museums, colleges, theaters, swimming pools, and
auditoriums . Here is a small sampling of projects funded in 2008 : 10
• $ 588, 000 for a marina in Alexandria , Lousiana
• $ 245, 000 for the expansion of an art museum in Allentown , Pennsylvania
• $ 147 , 000 for a canopy walk at the Atlanta Botanical Gardens in Georgia
• $ 196, 000 for expanding the Calvin Coolidge State historic site in Vermont
• $294,000 for a community recreational facility in New Haven , Connecticut
• $ 196,000 for the construction of an auditorium in Casper, Wyoming
• $441 ,000 to replace a county exposition center in Umatilla , Oregon
• $98 ,000 for the Pearl Fincher Museum of Fine Arts in Spring , Texas
• $ 245,000 for renovations to awnings at a historical market in Roanoke, Virginia
• $ 294,000 for the development of an educational program at the Houston Zoo in Texas
All these activities are purely local in nature, and there is no national interest in funding
them . CDBG funding runs completely counter to the federalist model of American
government.
Federal policymakers are supposed to make decisions on national issues such as defense and
security; it makes no sense for them to be city planners , but that's what the CDBG program
effectively lets them do .
Battling over Formulas
Moving funding for local projects up to the federal level injects federal politics into local
activities . The particular cities and counties that receive CDBG funding have long been
fought over in Congress . While the program was created to help high - poverty areas improve
basic services such as fire and police, the program currently spreads taxpayer largesse very
widely , including to some of the wealthiest areas of the country . 11
CDBG money is doled out based on complex formulas that do not target need very well . For
example, the wealthy community of Madison , Wisconsin , receives a CDBG allotment of a
similar size as low- income San Marcos, Texas, partly because a large group of temporarily
low-income college kids in Madison are included in the formula . 12 The 2009 federal budget
noted that the CDBG "formula has not been updated in over 30 years and as a result, many
lower- income communities receive less assistance than wealthier communities . i13 Experts
http ://www.downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development IDownsizing the Federal Government Page 4 of 12
occasionally try to fix such problems, but those reforms are usEallrbUsked by politicians
benefiting from the status quo.
One allocation item in the CDBG formula is " housing built before • AIL • ow did that
obscure item get into the CDBG formula ? The Northeast- Midwest Institute, which is a lobby
group for a regional group of states, got a member of Congress to insert it into legislation in
1977 in order to tilt aid toward older cities . 14 The Bush administration wanted to change this
formula item in 2006 because " many poor communities have torn down old, blighted
housing while affluent communities have rehabbed theirs, giving them a leg up in the
distribution of funds . i15 But the Bush proposal met stiff resistance from wealthier
communities such as Oak Park, Illinois, which would have lost some of its CDBG subsidies . '6
CDBG spending has gradually shifted from poorer to wealthier communities over time . '' For
that reason , the Bush administration rated the CDBG program "ineffective" due to its "weak
targeting of funds . i18 It noted , for example, that wealthy Greenwich , Connecticut, received
five times more funding per low- income resident than poorer Camden , New Jersey . 19 It
should not be the role of the federal government to redistribute income between regions, but
even if it was, the CDBG program is not very good at it.
Excessive Bureaucracy
One result of involving all three levels of government in funding local projects is rampant
bureaucracy . Local governments that receive CDBG funds spend 17 percent on
administration , on average, according to the Government Accountability Office . 20 For the
portion of CDBG funds that flow to state governments, state- level bureaucracies are an
additional cost. The GAO found that state government administration consumed 8 percent of
CDBG funds . On top of those costs are federal administration costs, which are about 5
percent of the value of grants . 2 '
After the government bureaucracies take their share, CDBG monies get distributed to the
private businesses and organizations that carry out funded projects . Federal rules usually
specify the share of funding that may be used by recipients for administrative costs, and 10
percent seems to be common . Thus, considering all the administrative costs at all layers of
government and private organizations, a large share of the CDBG budget disappears before
any actual work is done .
One cause of high administration costs in grant programs is that governments and private
groups must comply with complex federal regulations . Consider, for example, that the State
of Virginia 's CDBG manual explaining the regulations is 170 pages long , and the state's
application package for grant applicants is 132 pages long . 22
Waste and Abuse
Moving funding for local projects up to the federal level eliminates responsible city planning .
When local funds are used for local projects, local officials have an interest in ensuring that
the benefits of public projects outweigh the costs . But when the federal government is the
source of funds, local governments tend to invest in a range of inefficient and wasteful
activities .
The CDBG program also has a history of financial abuse and dubious project spending . In
2006, HUD's inspector general found that fraud by CDBG grant recipients was common—and
increasing . 23 After recently auditing a sample of just 35 CDBG grantees, investigators found
more than $ 100 million in improper or questionable spending, including :
• An audit of redevelopment projects in San Diego found that $ 12 . 9 million was spent on
activities there were ineligible or lacked proper records . For example, CDBG funds were
used improperly for a festival to celebrate a shopping center. 24
• The City of Chicopee, Massachusetts, spent $4 . 3 million on projects that were ineligible
or lacked proper records . Some of the funds went to the affluent neighborhood where the
mayor lived . In 2005, the mayor was arrested on extortion charges related to illegal
campaign contributions received in return for helping a developer obtain development
funds . 25
http ://www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development IDownsizing the Federal Government Page 5 of 12
• The City of Utica , New York, spent funds on a variety of improper uses, such as $902, 799
on a marina and $255, 158 on ski chalet renovations. 26 That is not the targeting of funds
to poor neighborhoods that CDBG supporters envisioned .
In 2006, HUD's inspector general reported that in just two and a half years of CDBG
investigations it had " indicted 159 individuals, caused administrative actions against 143
individuals, had 5 civil actions, 39 personnel actions, and over $ 120 million in recoveries. i27
The inspector general found that there were " repeated " problems with the program ,
including the improper use of funds , grantee inability to account for funds, and a lack of
monitoring and oversight .
Here is a sampling of some of the local- level scandals to hit the CDBG program over the
years :
• The economic development agency of Essex County, New Jersey, spent $ 1 . 6 million on
county administration in assisting just seven businesses . 28
• A government employee in East St. Louis pled guilty to income tax evasion after directing
$ 158,000 in CDBG funds to her bank account. 29 East St. Louis has long had corruption
problems with federal grant monies .
• Former South Dakota governor Bill Janklow directed $825, 000 of CDBG funds to a
shooting range, which HUD ruled was an improper use of funds . 30 HUD found that 9 of 12
CDGB awards it examined in the state failed to meet low- income targeting requirements .
• Miami officials used CDBG funds to back a $ 5 . 4 million low- interest loan for an
investment company controlled by a wealthy Saudi Arabian sheik. 31
• Selected audits of CDBG grantees in 1995 produced 31 indictments and 21 convictions
for misuse of funds . 32 Auditors found that the owner of a Louisiana sawmill used funds to
pay off personal debts, the city of Troy, New York used $ 1 . 6 million to lure a hockey
team to the city, and a California Indian tribe used $404, 000 to construct an off-track
betting facility .
• The head of the Multicultural Center in Modesto, California , who was a Democratic Party
activist, used $47 , 500 of CDBG money for personal and political purposes . 33
• The government of Washington , DC, gave $ 1 million to a funeral home for a business
expansion , which ended up never occurring . That prompted the Washington Times to
note : "It's an example of a repeated problem the city has administering its community
development block grants . "34
• Niagara Falls and Lockport, New York, used $ 12 million to build an amusement center,
which shut down after just six months of operation . The company behind the project pled
guilty to defrauding HUD . 35
The CDBG program has been a poster child for waste and abuse for decades . Unfortunately,
few members of Congress have shown any interest in cutting the program or even
conducting oversight. A 1989 news article explains why :
GAO investigators have been trying to interest congressmen in scrutinizing the
$3 billion Community Development Block Grant program . . . . Describing the
program as the " next bombshell " waiting to hit HUD, investigators said it is rife
with waste and mismanagement, but they got no takers . Lawmakers explained
that since they had been struggling to save the grants from Reagan 's budget
ax, they would be embarrassed by a scandal . In addition , many districts get
money from the program , and legislators do not want to launch a probe that
could turn off the spigot. 36
Despite all the abuses, perhaps policymakers believe that CDBGs are nonetheless effective
at stimulating growth . After 30 years and more than $ 100 billion it should be easy to
demonstrate the program 's success, but it' s hard to find any examples of city rejuvenation
created by the program . 37 Instead , numerous cities, such as Detroit, which have been major
CDBG recipients, have fallen further into decline . The reality is that no amount of federal
money can overcome the local hurdles to growth in cities such as Detroit— including political
corruption and destructive tax and regulatory policies . Indeed , just like international
development aid , federal aid to the cities likely increases corruption and stalls much - needed
local reforms .
http ://www. downsizinggovemment . org/hucVeommunity-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 6 of 12
With the federal government running huge deficits, it cannot a E ac:ai iPr: cacc,"45 n rr d
often wasteful local development projects . Community develop {ban Spending : : nd
only local leaders and businesses using their own funds can m . No Sacred , Cows
decisions on projects . By providing local leaders with handout , = ply
encourage them to make irresponsible decisions . At the same _ r= n
that federal politicians use local projects as political tools that -- • nd
economics .
ry�
Affordable Housing Grants
The HOME Investment Partnerships Program is a $ 2 . 3 billion block grant program
established by the National Affordable Housing Act of 1990 . It provides funding to state and
local governments to develop "affordable" housing for lower- income families . HOME funds
can be used for housing rehabilitation , assistance to homebuyers, rental construction , rental
assistance, and counseling services . 38
Funding recipients must match every dollar of HOME funds with 25 cents from nonfederal
sources . Recipients must also set aside 15 percent of their funding for housing development
activities in which nonprofit organizations are the owners, developers, or sponsors of the
housing . 39 A generous 10 percent of funds can be used for administrative costs .
In 2003 , Congress added an American Dream Downpayment Initiative to HOME . It provides
down payment, closing costs, and rehabilitation aid to first-time homebuyers with modest
incomes .40 A 2006 GAO report concluded that " limitations of HUD's data did not allow us to
draw any conclusions about the program 's accomplishments . i41 The Obama administration
labeled the program "duplicative" and called for its elimination . "42
Here are some typical audit findings by the HUD inspector general on the HOME program :
• Of $ 10 . 5 million received by Fulton County, Georgia , $6 . 4 million involved questionable
usage . 43 For example, one group was loaned $244,850 for a home- building project and
was then given another $ 220, 000 to cover cost overruns . The group went into default
and the taxpayer money was never recouped .44
• Bridgeport, Connecticut's HOME program ran afoul of auditors, who found almost $ 1
million in "unsupported " spending and excessive costs of various sorts .46
• Some grants received by the Puerto Rico Department of Housing were unauditabie due to
poor accounting , while others were for work not performed or for excessive costs . More
than $2 million of spending was " ineligible" or " unsupported . "46
• The city of Pontiac, Michigan , loaned a developer $ 1 . 4 million in HOME funds to construct
houses . The developer built shoddy homes and reneged on $367 , 000 owed to the
government. 47
Homeless Assistance Grants
In 2009, HUD spent $ 1 . 6 billion on homeless assistance grants, which were delivered
through a remarkably complex web of programs . The origin of these programs was the 1987
Stewart B . McKinney Homeless Assistance Act. 48 There are four separate homeless grant
programs, each with its own set of complicated rules : 49
• Emergency Shelter Grants. These are distributed to state and local governments, who
parcel the money out to local government agencies and nonprofit groups that provide
homeless services . Funding can be used for such items as emergency shelters, health
care, and rental and utility assistance . Up to 15 percent can be used for administrative
costs .
• Supportive Housing Program . These are competitively awarded grants to states, local
governments, public housing authorities, and nonprofit groups . Funds are to be used for
rehabilitation or construction of housing for the homeless, and for services such as health
care, counseling , and employment assistance .
http ://www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 7 of 12
• Shelter Plus Care Program . Grants are competitively award Spenclingfeut -
governments, and public housing authorities . Funds are int
supportive services and rent subsidies for disabled and ho Plan 2 13
• Single Room Occupancy. These grants are competitively awarded to public housing
authorities and nonprofits . Funds are used to rehabilitate properties to create multiple
single - unit rooms to permanently house the homeless .
These grants have created a labyrinth of bureaucratic red tape . HUD has taken some steps
to streamline the administrative burden , but Congress has not moved on GAO reform
recommendations . Regarding these grants, the GAO noted , "overlapping regulations and
reporting requirements, as well as the unpredictability of the competitive grants,
appropriation levels, and varying lengths of the grant awards made it difficult to administer
these programs . "5°
HUD is not the only federal agency that has programs for the homeless . According to a 2002
GAO report, there are 50 federal programs administered by eight agencies that provide
services to the homeless . 51 But even if federal homeless programs could be streamlined , this
sort of spending is not a proper federal responsibility . It makes more sense for charitable
groups and churches to deal with the problem on a local basis . Funds emanating from
Washington pass through multiple layers of bureaucracy, which results in waste and
ineffectiveness . The following are a sampling of audit findings on these homeless grants by
HUD's inspector general :
• The city of Dallas homeless grants are so poorly administered that auditors proposed that
all federal funding be cut off. 52 Thousands of dollars were spent on ineligible activities,
including rental payments for vacant apartments and for drug traffickers . The city's
reports included math errors, inconsistencies, and other problems .53
• A California grantee providing housing services for the homeless could not document
$ 108, 853 in expenses . Auditors criticized the poor oversight by local officials . 54
• A New York City housing grantee had $ 1 . 7 million in unsupported expenses, meaning
that the organization had no records to account for charges to the government. 55
• A Chicago housing grantee was found to have $671 , 252 in unsupported expenses, and
had used grant money to purchase ineligible items such video games, audio systems,
digital cameras, party supplies, and maintenance on the director's personal vehicle . 56
Housing for Persons with AIDS
The $289 million Housing Opportunities for Persons with AIDS program was established as
part of the National Affordable Housing Act of 1990 . HOPWA makes grants to state and local
governments for housing assistance and support services that benefit low- income persons
with HIV/AIDS . About 90 percent of the funds are distributed by formula and 10 percent by
grant competition .
As usual, the formula grants have prompted political battles over the geographic distribution
of funding . The current formula uses the cumulative number of AIDS cases in an area , which
illogically includes individuals who have died . S7 The Bush administration tried to change the
formula , but Congress has resisted fixing it, presumably because some cities would lose out
in any change in the formula .
As with other HUD grants, the HOPWA program has been plagued by waste, fraud , and
abuse :
• The city of New Orleans gave a politically connected nonprofit group $ 1 . 3 million for a
housing project on which it had already spent $ 1 . 7 million of federal funds—with nothing
to show for it. The New Orleans Times-Picayune noted , "It' s hard to believe that such a
sum was poured into the complex' s two squat, beige brick buildings . ... Nearly every
window is broken , leaving the units completely open to the elements . "S8 Much of the
grant money went toward six-figure salaries at the nonprofit group .
• The New York Post reported that New York City was using federal funds to place some of
its homeless AIDs patients in "glitzy" four-star hotels . 59
http : //www. downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 8 of 12
• A Washington, DC, nonprofit group "could not substantiate Federal al Policy in
federal funds" (92 percent of the HOPWA funds that it recei
inspector generah60 The inspector general found that the g r Via''-'iCc" '• ,,rant
dollars on cigarettes, movie tickets, and bingo games.
• The HUD inspector general found that a Virginia organization "could not substantiate how
it used $339,661 of$353,562 of grant funds it received from HUD under a Supportive
Housing Program renewal grant and a Housing Opportunities for Persons with AIDS
grant."61
Self-Help Homeownership Grants
The Self-Help and Assisted Homeownership Opportunity Program provides grants to facilitate
"self-help" homeownership. It was established by the Housing Opportunity Program
Extension Act of 1996 and cost$50 million in 2009. Low-income homebuyers provide "sweat
equity" by contributing labor toward the construction of their homes. Up to 20 percent of
SHOP funds can be used for administration.
Only a small number of nonprofit groups receive SHOP funds, including Habitat for Humanity
and the ACORN Housing Corporation.62 The latter group is part of the Association of
Community Organizations for Reform Now, which is a left-wing political outfit known for
perpetrating vote fraud.63 As one columnist noted, ACORN "promotes a 1960s-bred agenda
of anti-capitalism, central planning,victimology, and government handouts to the poor.i64 In
recent years, ACORN has received more than $2.7 million in SHOP funds.65
It is disconcerting that taxpayer money is entrusted to an organization with a political
agenda diametrically opposed to taxpayer interests. But it is also disturbing that reputable
organizations, such as Habitat for Humanity,jeopardize their independence by subjecting
themselves to the political controls that come with government money. Habitat used to
eschew government handouts, as its founder believed that "the conventional welfare-state
approach to housing robs the poor of their dignity.i66 Habitat has recently received over
$118 million in SHOP funds.67
Rural Subsidies
The Rural Housing and Economic Development program was created by Congress in 1998.
The program, which cost$24 million in 2009, provides grants to nonprofit groups, Indian
tribes, and state and local governments. The eligible activities for federal funding are
broad—everything from developing strategic plans to the acquisition of land and buildings.68
The HUD inspector general noted that RHED was at high risk of awarding funds to groups
that are incapable of achieving their stated objectives.69 While no inspector general audits of
RHED grantees are currently available, it is probable that similar waste and abuse plagues it
as plagues other community development programs.
The Bush administration tried to terminate RHED, arguing that it "is duplicative, particularly
of programs provided through the U.S. Department of Agriculture, which manages a portfolio
of rural housing and economic development grants programs that vastly exceed HUD's RHED
program.i70 Indeed, there are hundreds of federal programs that provide subsidies to rural
America.71
The RHED program was created to subsidize rural America within a department created to
subsidize urban America. It illustrates the propensity of lawmakers to spread the benefits of
spending as broadly as possible to garner maximum congressional support. But community
development, whether urban or rural, is not something that the federal government ought to
be involved in.
'Budget of the U.S. Government, Fiscal Year 2010, Analytical Perspectives,Table 27-1. All
data are for fiscal years.
2 See www.hud.gov/offices/cpd/index.cfm.
http://www.downsizinggovernment.org/hud/community-development 1/13/2014
Community Development I Downsizing the Federal Government Page 9 of 12
3 Quoted in Steve Malanga , "America ' s Worst Urban Program 4 �• ' .spending
4 Ben Canada , " Federal Regulation of State and Local Govern = iC , Charts r ;
Congressional Research Service, RL- 30705 , February 19, 2003 , p. Y .
5 Advisory Commission on Intergovernmental Relations, " Federal Regulation of State and
Local Governments : The Mixed Record of the 1980s, " July 1993, p . vi .
6 For background on the creation of Community Development Block Grants, see Advisory
Commission on Intergovernmental Relations, "Community Development : The Workings of a
Federal- Local Block Grant, " March 1977, p . A- 57 .
7 The $8 billion figure represents outlays for the entire Community Development Fund . For
details, see Budget of the U. S. Government, Fiscal Year 2010, Appendix, pp. 581 -82 .
8 See www . usaspending . gov.
9 See www . hud . gov/offices/cpd/communitydevelopment/programs .
10 Taxpayers for Common Sense, " Fiscal Year 2008 Earmarks Database , " www . taxpayer. net .
11 Government Accountability Office, "Community Development Block Grants : Program
Offers Recipients Flexibility but Oversight Can Be Improved, " GAO-06-732 , July 2006, p. 7 .
12 Eileen Norcross, George Mason University, (testimony before the Subcommittee on
Federal Financial Management, Government Information , and International Security of the
Senate Committee on Homeland Security and Government Affairs, June 29 , 2006) .
13audget of the U. S. Government, Fiscal Year 2009, Appendix, p . 553 .
14 Rochelle L. Standfield , " Playing Computer Politics with Local Aid Formulas, " in American
Intergovernmental Relations, ed . Laurence J . O'Toole (Washington : Congressional Quarterly,
1985) , p . 175 .
15 Paul Merrion , " Proposed Shift in Urban Grants Creates, Winners, Losers in IL, " Crain 's
Chicago Business, May 26, 2006 .
16 Paul Merrion , " Proposed Shift in Urban Grants Creates, Winners, Losers in IL, " Crain 's
Chicago Business, May 26, 2006 .
17 Congressional Budget Office, " Budget Options, " February 2005, p . 142 .
18Budget of the U. S. Government, Fiscal Year 2005, " Program Assessment Rating Tool ,
Program Summaries, " p . 206 .
19 Government Accountability Office, "Opportunities for Oversight and Improved Use of
Taxpayer Funds : Examples from Selected GAO Work, " GAO -03- 1006, August 1 , 2003 , p . 232
20 Government Accountability Office, "Community Development Block Grants : Program
Offers Recipients Flexibility but Oversight Can Be Improved , " GAO-06 -732, July 2006, p . 13 .
21 This is a rough estimate from comparing total administration costs to total grants and
subsidies for the overall department.
22 See www . dhcd . virginia . gov/CD/CDBG/docs/2006Manual . pdf and
www . dhcd . virginia . gov/CD/CDBG/docs/2006_CompetitiveGrant_RFP . pdf.
23 " Fraud Grows in Urban Grant Program , " Washington in Brief, Washington Post, June 30,
2006, p . A5 .
24 See Department of Housing and Urban Development, Office of Inspector General , "The
City of San Diego, California , Did Not Administer Its Community Development Block Grant
http : //www . downsizinggovernment. org/hud/community-development 1 /13/2014
Community Development I Downsizing the Federal Government Page 10 of 12
Program in Accordance with HUD Requirements When Funding the CityjstgesOppment
Agency Projects;" 2009- LA- 1005, December 2008 .
ZS See_.Department of Housing and Urban Development, _Office or inspector spbenerai, . i nee
City of Chicopee, Massachusetts Did Not Properly Administer More than $4 . 3 Million in
Community Development Block Grant Funds, " 2008- BO- 1001 , November 7, 2007 .
26 See Department of Housing and Urban Development, Office of Inspector General , "City of
Utica : Community Planning and Development Programs , " 2002- NY- 1003 , September 5,
2002 .
27 Kenneth M . Donohue, inspector general , Department of Housing and Urban Development
(testimony before the Subcommittee on Federal Financial Management, Government
Information , and International Security of the Senate Committee on Homeland Security and
Government Affairs, June 29, 2006) , p. 4 .
28 Philip Read , " Economic Agency Taken to Task for Development Loans, " New Jersey Star-
Ledger, February 15 , 2009 , p . 37 .
29 Michael Shaw, " Embezzlement is Uncovered in Block Grants, " St. Louis Dispatch -Post,
November 4, 2005 , p . C5 .
30 Michael Moreland, " Misuse of HUD Funds Traced to Janklow's Office, " Native Voice, March
7 , 2004, p . 1 .
31 Michael Blood , " Miami Officials Take Heat for CDBG Project, " Associated Press, March 18,
1992 .
32 Penny Loeb, "Waste, Fraud , and Abuse, " U. S. News & World Report, March 27 , 1995, p .
26 .
33 Alvie Lindsay, " City Wants Money Back From Multi -Cultural Center, " Modesto Bee,
December 21 , 1991 , p . 1 .
34 Chris Harvey, " HUD, DC Struggle to Correct Abuse of Block Grant Loans, " Washington
Times, October 22, 1991 , p . B3 .
35 Penny Loeb, "A Federal Housing Program and its History of Hits and Misses, " U. S. News &
World Report, March 29, 1993 , p . 25 .
36 Steven V. Roberts and Joseph P . Shapiro, "The Howl of Congressional Watchdogs, " U. S.
News & World Report, September 11 , 1989, p . 24 .
37 For a discussion , see Eileen Norcross, George Mason University (testimony before the
Subcommittee on Federal Financial Management, Government Information , and
International Security of the Senate Committee on Homeland Security and Government
Affairs , June 29, 2006) , p . 26 .
38 See www. hud . gov/offices/cpd/affordablehousing/programs/home/index . cfm .
39 See www . hud . gov/offices/cpd/affordablehousing/programs/home/topical/chdo . cfm .
4o See www . hud .gov/offices/cpd/affordablehousing/programs/home/addi .
41 Government Accountability Office, " HUD Homeownership Programs : Data Limitations
Constrain Assessment of the American Dream Downpayment Initiative, " GAO-06- 677 , June
2006, p . 3 .
42 Office of Management and Budget, A New Era of Responsibility (Washington : Government
Printing Office, 2009 ) , p . 75 .
http : //www . downsizinggovernment. org/hudlcommunity-development 1 / 13/2014
Community Development I Downsizing the Federal Government Page 11 of 12
43 Department of Housing and Urban Development, Office of Inspector General , " Fulton
County, Georgia , Lacked Adequate Controls Over Its HOME Program , " 2008 -AT- 1006, March
7 , 2008 .
44 Alison Young , " Fulton Wasted HUD's Money, " Atlanta Journal-Constitution , November 16,
2008 .
45 Department of Housing and Urban Development, Office of Inspector General , "City of
Bridgeport : Home Investment Partnership Program , " 2003- BO- 1003 , May 16, 2003 .
46 Department of Housing and Urban Development, Office of Inspector General , " Puerto Rico
Department of Housing : State Home Investment Partnership Program , " 2003-AT- 1006, July
30, 2003 .
47 Department of Housing and Urban Development, Office of Inspector General , " Pontiac
Neighborhood Housing Services, Incorporated : Home Investment Partnership Program, "
2004- CH - 1004, May 5 , 2004 .
48 The Stewart B . McKinney Homeless Assistance Act was renamed the McKinney-Vento Act
in 2000 .
49 See www . hud . gov/offices/cpd/homeless/programs.
so Government Accountability Office, " Homelessness : Consolidating HUD' s McKinney
Programs, " T- RCED-00- 187, May 23 , 2000, p . 8 .
51 Government Accountability Office, " Homelessness : Improving Program Coordination and
Client Access to Programs, " GAO-02-485T, March 6 , 2002 , p. 12 .
52 Department of Housing and Urban Development, Office of Inspector General , "City of
Dallas : Continuum of Care Program, " 01 - FW-251 - 1002, December 13, 2000 .
53 Department of Housing and Urban Development, Office of Inspector General , "City of
Dallas : Continuum of Care Program, " 01 - FW- 251 - 1002, December 13, 2000, p . 9 .
54 Department of Housing and Urban Development, Office of Inspector General , "Institute for
U rban Research and Development, El Monte, California , Did Not Properly Administer Its
Supportive Housing Program Grants, " 2006- LA- 1015, July 19, 2006, p . 6 .
55 ▪ Department of Housing and Urban Development, Office of Inspector General , "Safe
S pace, Inc. : Housing Opportunities for Persons with Aids, grant no . NYHOO-0020 ; and
S upportive Housing Program, grant no . NY36B97-0025, New York, New York, " 2003- NY-
1802, July 24, 2003, p . 3 .
56 ▪ Department of Housing and Urban Development, Office of Inspector General , " New
Phoenix Assistance Center, Chicago, Illinois, Substantially Failed to Manage Its Supportive
Housing Program Grants, " 2009-CH - 1001 , October, 24, 2008 .
57 See Government Accountability Office, " HIV/AIDS : Changes Needed to Improve the
Distribution of Ryan White CARE Act and Housing Funds , " GAO-06-332, February 2006 .
58 Gordon Russell , "$ 1 . 1 Million Spent, but Complex Still Rots, " New Orleans Times-Picayune,
May 16 , 2004, p . 1 .
59 Dan Mangan and Jessie Graham , "City Using Posh Hotels as AIDs Shelter, " New York Post,
April 11 , 2001 , p . 2 .
60 • Department of Housing and Urban Development, Office of Inspector General , "Safe Haven
Outreach Ministry, Incorporated , Washington , DC, " 2004- PH - 1008 , June 3 , 2004 .
61 ▪ Department of Housing and Urban Development, Office of Inspector General , " Peninsula
AIDS Foundation , Incorporated , Newport News, Virginia , " 2004- PH - 1006, May 17 , 2004 .
http : //www. downsizinggovernment. org/hud/community-development 1 / 13/2014
Community Development I Downsizing the Federal Government Page 12 of 12
62 , See www . hud . gov/offices/cpd/affordablehousing/programs/shop/index . cfm # grantees .
63 Elizabeth Williamson and Brody Mullins, " Democratic Ally Mobilizes in Housing Crunch , "
Wall Street Journal, July 31 , 2008 .
64 Sol Stern , "ACORN 's Nutty Regime for Cities , " City Journal, Spring 2003, www . city-
journal . org .
65 See www . hud . gov/offices/cpd/affordablehousing/programs/shop/expenditure . pdf.
66 Howard Husock, America 's Trillion-Dollar Housing Mistake: The Failure of American
Housing Policy ( Chicago : Ivan R. Dee, 2003) , p . 117 .
67 See www . hud . gov/offices/cpd/affordablehousing/programs/shop/expenditure . pdf.
68 See www . hud . gov/offices/cpd/economicdevelopment/programs/ rhed .
69 Department of Housing and Urban Development, Office of Inspector General , "Audit of
Management Controls over Grantee and Subgrantee Capacity, Community Planning and
Development, Washington, DC, " 2004- FW-0001 , June 18 , 2004, p . 15 .
70 Budget of the United States Government, Fiscal Year 2009, Appendix, p . 557 .
71 SRI International for the Federal Home Loan Bank of Des Moines, "Crafting a Competitive
Future, " April 2005 , p. 45 .
Departments : Housing and Urban Development
Cato Institute
1. 000 Massachusetts Avenue N . W .
Washington D . C. 20001 - 5403
Telephone ( 202) 842-0200
contact @downsizinggovernment. org
http ://www. downsizinggovernment. org/hud/community-development 1 / 13/2014