More than 18 months after questions about the high salary paid to Chelsea Public Housing Authority Executive Director Michael McLaughlin pulled the curtain back on his corrupt fiefdom, efforts to reform the state’s hundreds of local housing authorities appear stalled.

Local housing authorities are agencies that run the state’s 80,000 state and federally funded public housing units, repairing and maintaining property and overseeing the selection of new tenants. Created in the aftermath of WWII, as huge swaths of public housing were being created across the country, Massachusetts has a housing authority for practically every one of the state’s 351 towns – 242, second only to Texas, which has four times the population of the Bay State. Each authority has its own executive director and board, which are funded by a mix of state, local and federal dollars.  

The McLaughlin scandal – he had convinced his board to grant him a salary of more than $300,000, making him one of the top five highest – paid housing authority directors in the country, according to the U.S. Department of Housing and Urban Development – revealed how little oversight the local housing authorities enjoyed.

Prevention Efforts Stalled

McLaughlin himself is awaiting sentencing next month after pleading guilty to fraud, but efforts to prevent similar abuses in the future appear stalled.

The state Department of Housing and Community Development (DHCD), which has control over the authorities, has put some reforms in place: As of this fiscal year, the authorities have to submit their budgets for an annual review, and executive salaries at the agencies have been capped to no more than $160,000, with agencies who fail to comply with these requirements subject to having their state funding cut off. (A review of existing contracts turned up only three authorities whose current executive director’s salaries exceeded the cap: Cambridge, Brockton and Ayer/Methuen, the last of which share the same director.)  

But Gov. Deval Patrick has pushed to go much further in reforming the authorities, submitting a radical reform bill in January that would consolidate the existing 244 agencies into six regional housing authorities. Communities would still be able to create voluntary local oversight committees, but the existing executive boards would be replaced by six regional boards, and back office functions like accounting and human resources would be consolidated. Building maintenance and other on-site staff would be unaffected. The plan could save the state millions, according to the governor’s office.

The governor “believes that we owe it to tenants and taxpayers to reform the public housing system,” said Matthew T. Sheaff, a spokesman for DHCD. “His legislation does that.”

But legislators have balked at the proposal. While Patrick included provisions in his budget for funding the regionalization plan in the hopes of passing it in this session, the legislatures’ housing committee declined to even schedule a hearing on it.

Instead, many lawmakers seem inclined to favor a bill sponsored by the Massachusetts chapter of the National Association of Housing and Redevelopment Officials, a trade association for public housing administrators.  

The MassNAHRO bill, which has 56 co-sponsors, including several who sit on the housing committee, would require agencies which oversee fewer than 100 units to subcontract some of their administrative and capital planning efforts to larger agencies, helping to create economies of scale, said MassNAHRO Executive Director Tom Connelly. According to DHCD, 109 housing authorities operate with less than 100 units.

The housing authorities “were very receptive to getting help with those services from the larger agencies, through contracted services. But it would be to different degrees. Some of them do very well with capital improvement, but they don’t do well with unit turnovers. They’ll be able to tailor whatever they want the agency to provide them,” said Connelly.

Additionally, DHCD could force larger agencies into such subcontracting arrangements if they weren’t up to snuff.

But crucially, each agency would remain independent and retain its own board and executives. Most of the other reform measures included in the bill – centralizing wait lists so that units don’t remain vacant, for example – DHCD says it’s already putting in place.  

Asked how abuses like McLaughlin’s could be prevented under the MassNAHRO bill, Gleeson said that the failures of oversight in the Chelsea case were widespread and went beyond the board level.

“That board was as guilty as he was. Corruption is corruption….if auditors turn their backs on it, and accountants who don’t report it, and staff who don’t what’s going on, that kind of stuff is going to happen. But that kind of case is unusual. We have so many safeguards built into the program now,” he said. “We feel that the bill is a step toward improving these agencies rather than just throwing out everything, as the governor suggests.”

Sources on Beacon Hill told Banker & Tradesman that the two bills are likely to be reviewed this fall, and the housing committee plans to schedule three public hearings on the bill in various parts of the state. Some legislators have already met with local housing authority executives in Leominster, which already operates under a subcontracting arrangement similar to that proposed in the MassNAHRO bill, to review their practices.

Email: csullivan@thewarrengroup.com