Nassau no longer managing housing vouchers

Nassau County has lost control of a major federal housing program that it administered for decades after the state turned it over to a local nonprofit.

The move came after Nassau's performance slipped in recent years, and after the Community Development Corporation of Long Island, which manages the program for Suffolk County, submitted a lower bid for the state's Housing Choice Voucher program, county and state records show.

Nassau lost the contract in early 2022 after the state selected the nonprofit to distribute the vouchers. The county since has disbanded its Office of Housing and transferred 16 employees to other agencies or departments, officials said.

CDCLI, which took over the program Dec. 1, is moving its headquarters to Melville in May from Centereach and also has an office in Nassau. 

The county finished third in a state bidding process after submitting an application at the end of former Democratic County Executive Laura Curran's tenure. The application said County Executive-elect Bruce Blakeman, a Republican, was consulted and supported it. 

The State Division of Housing and Community Renewal (HCR) said the primary reason Nassau lost the contract was because it asked for a 33% increase in the administrative fee it receives for each voucher, from $59 to $78. The nonprofit proposed a $61 fee. CGI Federal, a consulting firm that works with public housing authorities, ranked second, state records show.

The Housing Choice Voucher program is available to individuals or families who have low enough incomes to qualify for the subsidy. The dollar amount depends on the applicant's income and what their approved rent or mortgage is. 

Nassau, which had run the program since 1986, did not have to bid for a contract until 2021. That's when the bidding process was implemented to make sure there was "fair competition and best value," according to state officials.

The state said it is required by law to contract with an agency that provides the best value for managing the program.

"HCR determined through a competitive procurement process that CDCLI submitted the most competitive, highest-rated proposal to administer the Section 8 Housing Choice Voucher contract in Nassau County," Charni Sochet, a spokeswoman for HCR, said in a statement. "We are confident that they will successfully administer the program in accordance with the duties laid out in the contract."

Blakeman, whose administration appealed the decision last year, said in a statement: "I believe with my team in place, we would have been able to better administer this important program but unfortunately that opportunity is not available. All of the employees of the housing department have been absorbed within county government and we stand ready to assist our residents with housing issues the best we can.”

Nonprofits are often chosen to administer Section 8 programs because they can run them in a more cost-effective way, said Robert Silverman, a professor of urban planning at the University at Buffalo.

"It's fairly common around the country," he said.

Performance scores slip

In the past two years, Nassau has scored low on annual audits required by the federal government and administered by the state. 

The Section Eight Management Assessment Program reviews focus on performance in 14 areas such as "proper selection of applicants from the housing choice voucher waiting list," assuring that "all available housing vouchers are used" and that the administrator distributes vouchers to homes "outside areas of poverty or minority concentration." 

After scoring 90% and 86% in 2018 and 2019, Nassau scored 55% in 2020, and 65% in 2021, according to the county. The state adjusted the 2020 score to 83% after the county contested it, and declined to change the 2021 score. The 2022 score was not available.

State officials said 40 of 45 counties in 2021 saw their audit scores drop by an average of 17 points after the state changed the way it evaluated local administrators.

Nassau's "utilization rate," which measures the number of vouchers issued compared with the number available in a particular year, has declined as well.

The county's rate was 99.2% in 2018; 94.6% in 2019; 91.9% in 2020; 90.4% in 2021; and 83.1% in 2022, according to the state.

In Suffolk, the rate was 97.6% in 2018; 95.2% in 2019; 94.3% in 2020; 92.8% in 2021; and 90.5% in 2022.

“Our hope is to have the program mirror Suffolk’s utilization,” said Gwen O’Shea, CDCLI president and chief executive. "We ideally want to see both programs as close to 100% as possible."

Recipients face challenges 

Nassau was managing 2,550 vouchers in 2021, according to its application to the state. In recent years it had taken over voucher programs in the Town of Hempstead and the villages of Island Park and Farmingdale.

The CDCLI will run those local voucher programs as well, state officials said.

Advocates say there's a significant need for Section 8 housing in Nassau, which has a tight market and expensive rents.

A total of 2,670 households are on wailists for vouchers in the county, state officials said. There are 2,850 on waitlists in Suffolk, they said.

“We have a housing crisis on Long Island,” O'Shea said. “That's really challenging for people participating in the program, because they're competing with other individuals who are also looking for rentals and may be able to pay over market” value.

The levels of subsidies are another problem that tenants face, Silverman said. 

"If those subsidies aren't high enough so that people can afford the units that become available, that also becomes a barrier to moving to a community," he said.

One "game-changer" is that, with federal approval, subsidies can go up to 120% of the fair market value of rentals in the area, O'Shea said.

But another issue, she and experts said, is landlords illegally refusing to rent to people paying with public funds, subsidies and other housing vouchers.

"There is a profound amount of discrimination — source of income discrimination — that takes place," O'Shea said. "And that makes the challenge even greater for participants in terms of finding housing."

State's decision contested

Blakeman's administration protested losing the Section 8 contract. 

In a letter appealing the decision last March, Deputy Nassau County Attorney Errol Williams said the fact that the state allowed Nassau to take over the Town of Hempstead's Section 8 program in 2020, which had a waitlist of more than 4,000 at the time, suggested "a high level of confidence" in county officials' "performance and ability to manage the program."

Williams also said “it is the county’s contention that the process of selecting the winning bid was manipulated so as to achieve a predetermined outcome, and as such, the process was arbitrary and capricious.”

In a letter denying the appeal, HCR executive deputy commissioner and chief operating officer Betsy Mallow said: "In this case, Nassau County has produced no proof of 'favoritism, fraud, corruption and serious unfairness,' while [the state] has provided reasonable and rational reasons for its conduct, including the award to CDCLI at a price lower than Nassau County."

She said the county's utilization rate in Hempstead was 33% despite the state's request to increase it.

By Scott Eidler

scott.eidler@newsday.com@ScottEidler

Scott Eidler is a deputy editor for the towns department at Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.