Milwaukee’s rental program, considered a fraud risk, will be run by outsiders

Milwaukee’s $42 million rental assistance program will be run by a private Florida provider starting Jan. 1 — marking a controversial conclusion to a long saga.

Last year, after federal auditors found “the risk of serious fraud, waste and abuse.” The City of Milwaukee Housing Authority was ordered last year to relinquish control of its Housing Choice Voucher program, also known as Section 8.

The office of the voucher program, which serves nearly 6,000 low-income families in Milwaukee, was in disarray when federal inspectors showed up in late 2022, according to two reports from the U.S. Department of Housing and Urban Development.

Boxes of unprocessed tenant documents lined the office’s hallways and stairwells, some stacked nearly 5 feet high, the report said. Housing Authority executives could not produce receipts to explain $50,000 in credit card spending, nor could they explain more than $3 million in variations in the agency’s bank balance, auditors also reported.

On Wednesday night, the Housing Authority’s Board of Commissioners voted to outsource management of the voucher program to Tampa-based consulting firm CVR Associates, Inc.

The firm is expected to sign the contract, worth about $4 million a year, in the coming days and will soon begin a leadership transition to take over one of Milwaukee’s largest aid programs.

The contractor promises to fix the malfunction and bad customer service

Milwaukee’s Housing Choice Voucher program, which administers federal rental assistance on behalf of low-income, elderly or disabled renters, has a reputation for poor customer service and dysfunction.

Legal Action of Wisconsin, a legal aid organization that has taken on more than 400 cases involving the Housing Authority, said the Housing Authority routinely makes record-keeping mistakes that put tenants at risk of losing their housing — including failing to process tenants’ documents and making late payments to landlords.

When tenants call the Section 8 office to ask for help, Legal Action said, “they often get voicemail but can’t leave a message. If I can leave a message, no one returns their call. If their call is answered, they are left on hold. 45 minutes before they give up or are promised someone will call them later, but no one ever calls them back.”

CVR has promised to reverse these response times, resolving tenant questions or concerns within 48 hours.

It will also pay a subcontractor $975,000 to review records for all tenants participating in the program — something that was ordered by federal regulators.

All Rent Assistance Program employees will have to reapply for their positions — and while applications from current employees will be given preference, none of their jobs are guaranteed.

Housing Authority Board Chair Brooke VandeBerg said the Housing Authority has tried to ensure that high-performing employees are not penalized for uncontrollable driving mistakes.

Asked if Section 8 program director Jackie Martinez would remain under the program’s new leadership, Housing Authority spokeswoman Amy Hall said “CVR will be interviewing for all positions under the proposed organizational structure.”

CVR will be paid 80 percent of the administrative fee the Housing Authority receives from the federal government—a number that fluctuates based on the number of vouchers the program administers. Last year, the Housing Authority received about $5 million in administrative fees, meaning CVR would earn about $4 million.

Critics accuse the board of “trying to push through” the decision and avoid scrutiny

The Housing Authority’s special board meeting to vote on the contract was unusually quiet. Only two people signed up to speak during the public listening session – one of whom was an employee of the Housing Authority.

Critics, who say a private company should not be entrusted with an essential public service, blasted the board for scheduling the meeting with just 24 hours’ notice.

Common Ground, a local nonprofit that has campaigned for Housing Authority reform, boycotted the meeting, arguing that the listening session was just a “public relations stunt” and that the board’s decision was a foregone conclusion.

“Once again, Mayor Johnson and (Housing Authority Executive Secretary) Willie Hines are trying to sneak through a 5-8 year decision to privatize the $47 million Section 8 program to a company Florida for-profit (CVR Associates) through the defunct HACM board,” Common Ground said in a statement Wednesday.

Common Ground urged the Housing Authority to consider an alternative offer from the Milwaukee County Department of Health and Human Services. Housing servicesgiven its local presence and track record of success, running its own Housing Choice Voucher program.

The group also said the vote should be delayed until the Housing Authority Board, which is reduced to just four members, is fully staffed.

Karen Gotzler — a consultant who has helped turn around other struggling public housing authorities — is expected to be confirmed to the Housing Authority’s Board of Commissioners Nov. 6 by the Milwaukee Common Council.

Two of the mayor’s other nominees are expected to be considered by the council soon.