City seeks help from HUD to address troubled Indianapolis Housing Agency

The city of Indianapolis and the U.S. Department of Housing and Urban Development will soon begin negotiations to restructure the Indianapolis Housing Agency, the Mayor’s Office announced Monday.

The two parties sent a letter earlier Monday to IHA Board of Commissioners Chair Michael Allen. The letter expressed intent to negotiate a legally-binding agreement that will outline roles and responsibilities of IHA, the federal department and the city. The contract would be a cooperative endeavor agreement, or CEA.

The partnership aims to address “financial and structural issues” within the IHA, the Mayor’s Office said. The local low-income housing authority has faced recent financial troubles, understaffing, and litigation from the Indiana attorney general and tenants. In late October 2022, the agency was hit by a ransomware attack.

“I want to thank HUD for [its] collaboration as we have sought to improve the operations of IHA,” Hogsett said in a written statement. “My office first approached HUD late last year requesting permission to play a more active role in the restructure and modernization of the Indianapolis Housing Agency. We have continued to press forward with our discussions with HUD leadership, and we’re optimistic they will conclude before the end of the year.”

Allen did not respond to a request for comment.

IHA Executive Director Marcia Lewis was first appointed to lead in the interim after former Executive Director John Hall departed with two months left on his contract. In March, her mayoral appointment to the permanent position was approved by the Indianapolis City-County Council.

“IHA welcomes the news that the city and HUD intend to pursue a cooperative endeavor agreement,” Lewis wrote in a statement to IBJ. “Over the past year and a half, we have made a number of changes to enhance our operations and maintenance. However, it is clear we still have a number of challenges that require more significant intervention. We believe that the cooperative endeavor agreement between the city and HUD will help us emerge stronger on the other side.”

The next steps are to finalize the CEA and to commence procurement for a third-party consultant to evaluate the results of a recent HUD review as well as to evaluate IHA’s oversight, management and operations.

Both Lewis and the city said tenants will be unaffected by the change. They said tenants should use the same tools to request maintenance, pay bills and use other services until otherwise notified.

The cyberattack incident is cited in the Dec. 15 letter from former Hogsett administration Senior Policy Advisor Jeff Bennett requesting the CEA. He told HUD, “IHA needs additional, immediate support that the agency and the city of Indianapolis cannot provide on their own.”

The city allocated $2.5 million in direct funding to support IHA maintenance staffing and operational needs last year. In 2019, the mayor’s office and the Indianapolis City-County Council reconstituted the entire board.

Bennett said the agency needed help in IT infrastructure, finance, project-based rental assistance, rental assistance demonstration, housing choice voucher program management, capital management and property maintenance.

Lewis has been open about the agency’s financial distress, telling a City-County Council committee in March that the agency had begun selling off properties to stabilize the organization and had to borrow money to make payroll.

“This agency is in fact deeply troubled,” she said. “It is financially, programmatically, operationally troubled, and it needs the attention of someone with experience in that area and who cares about the people they serve.”

The IHA serves over 30,000 residents through its public housing, rental assistance demonstration and housing choice voucher programs.