Tag Archives: private landlords

U.S. senators call for banning, prosecuting ‘slumlords’ of military housing

By M.B. Pell

NEW YORK (Reuters) – U.S. senators on Tuesday demanded the Defense Department crack down on private landlords who provide substandard housing at military bases with criminal prosecutions or contract cancellations, citing Reuters reports of slum-like living conditions and falsified accounting.

The top civilian and military leaders of the Army, Navy and Air Force appeared before the Senate Armed Services Committee, in the latest hearing addressing substandard military housing.

On Tuesday, senators were presented with a new report from the Government Accountability Office, a Congressional watchdog conducting a review of the housing program that was launched following the Reuters reports. Among the GAO’s core findings: Housing reports sent to Congress are often misleading, painting a falsely positive picture of housing conditions. The program also suffers from inaccurate landlord maintenance reports and lax military oversight, the GAO reported.

To read the GAO report, click: https://bit.ly/35UzZbC

Some senators asked whether the military’s two-decade-old program of having private landlords provide housing on U.S. military bases has failed.

“Are any of them not acting like slumlords at this point? Are any of them doing a good job?” asked Senator Martha McSally, an Arizona Republican and former U.S. Air Force combat pilot. “This pisses me off.”

For more than a year, Reuters has exposed lead, asbestos, mold and vermin contaminating homes where private landlords house thousands of military families on behalf of the Pentagon. More recently, the news agency disclosed how one major landlord doctored maintenance records at some of its bases to help it collect bonus incentive fees.

To read the coverage, click: https://reut.rs/2r1Bkim

Top Defense Department officials have long touted high occupancy rates and satisfaction scores on military family surveys as evidence the effort is generally successful, despite occasional hiccups. But Elizabeth A. Field, the GAO’s director of defense capabilities and management, told senators: “There’s clearly a problem here.”

Army Secretary Ryan McCarthy defended the privatization effort, saying it allowed the military to tap private borrowing that would otherwise be unavailable.

“That doesn’t mean it’s worked out great,” added Acting Navy Secretary Thomas B. Modly. Some privatized housing is “fantastic,” he said, but other housing is not.

The secretaries cited reform steps already taken, including far-reaching inspections of military housing and a planned tenant bill of rights to empower military families.

Senators pressed the secretaries to do more to hold accountable military leaders and landlords.

Oklahoma Republican Jim Inhofe, chair of the Senate Armed Services Committee, asked Air Force Secretary Barbara M. Barrett why she couldn’t “pull the plug” on Balfour Beatty Communities, one of the military’s largest landlords.

This year, Reuters quoted five former Balfour Beatty employees who said they filed false maintenance records at Air Force bases to help the company collect millions in bonus payments. Balfour Beatty, a unit of British infrastructure giant Balfour Beatty PLC <BALF.L>, has said that it is committed to improving its maintenance, and that it has tapped outside counsel and auditors to investigate.

Air Force Secretary Barrett said the Air Force has lost confidence in the company, but stopped short of committing to removing it from the program.

A company spokesman said Balfour Beatty plans this month to finish a “performance improvement plan” requested by the Air Force.

Democratic senators Richard Blumenthal, from Connecticut, and Mazie Hirono, from Hawaii, urged the military to refer instances of fraud for criminal prosecution.

“We probably need to make an example out of a couple of them,” said Senator Thom Tillis, a North Carolina Republican.

(Reporting by M.B. Pell in New York. Additional reporting by Joshua Schneyer. Editing by Ronnie Greene)

U.S. Army vows more funds, measures to fix housing hazards

By Joshua Schneyer and M.B. Pell

(Reuters) – Pledging to overcome a housing crisis on its installations, the U.S. Army is outlining new steps it is taking to provide better housing for families of service members while demanding accountability from private landlords and Army commanders.

In an interview, Army Secretary Ryan McCarthy said private real estate firms operating housing on military bases have already committed some $500 million to address substandard conditions like those documented in a Reuters series, Ambushed at Home.

McCarthy, confirmed by the U.S. Senate last month as the Army’s senior civilian official, said more money is needed to build new housing on Army bases and renovate thousands of existing units. In the coming months, McCarthy said, the Army will consider a broad “recapitalization” of its housing program with its private partners.

The Reuters series documented housing hazards including shoddy construction, mold and pest infestations, the presence of lead-based paint and others.

Already this year, the Army has moved 1,800 families into temporary housing while repairing their homes, it said. It has been sending military personnel to inspect each home in its 87,000-unit portfolio for environmental threats, and, with its partners, has spent an extra $68 million addressing maintenance delays, the Army added. Going forward, the Army will require regular home inspections for safety hazards including peeling lead paint, mold and asbestos, it said.

In addition, the Army has hired 100 new housing inspectors and is requiring private landlords to create phone apps so residents can track the progress of maintenance work, it said.

“There was a breakdown over the last decade,” McCarthy said. “These are hard lessons learned, but we’re trying to dig out quickly.”

McCarthy added, “Behaviors have changed.”

Starting in January, McCarthy said, the Army will change the way it approves incentive fee payments to its private landlords to ensure that firms do not profit from homes left in disrepair.

The Army has placed four-star General Gus Perna, who heads the Army Materiel Command, in charge of personally approving all incentive fees paid to the housing partners, which can be worth millions of dollars each year.

“I have one metric: Make sure our families live in the best base housing possible,” Perna said.

Housing problems also have plagued U.S. Navy, Marine Corps and Air Force bases, often stemming from landlord neglect, shoddy construction and lax military oversight.

A recent Reuters report described how an Air Force landlord falsified maintenance records to help it win incentive fees.

Since the late 1990s, nearly all family housing on domestic U.S. military bases has been privatized. Developers and property managers who oversee the homes hold 50-year contracts worth billions of dollars. But the privatization program gave families little recourse to challenge landlords, who can deduct rent from military paychecks of service members. Now, the Army is holding regular town hall meetings to let residents air concerns. Other service branches have followed suit.

Some landlords have committed to new housing investments. Rhode Island-based Corvias, among the Army’s top partners, recently arranged $325 million in lending to launch upgrades, McCarthy said. Some $100 million is targeted for Fort Bragg in North Carolina, the most populous U.S. base, where residents have cited mold and leaks.

“A lot of work remains,” McCarthy said. “We just want families to know we’re going to get out of this.”

(Reporting by Joshua Schneyer and M.B. Pell; Editing by Ronnie Greene and Will Dunham)