Doug Garver says, 'There was a compliance breakdown in the Toledo region, but the issue is not systemic.'
COLUMBUS -- Officials from the Ohio Housing Finance Agency will be in Toledo next week to meet with city officials and other parties about what can be done in regards to vacant tax credit properties blighting several city neighborhoods.
Betty Kemper says, 'I want us to fix what we failed to do. Things happen, but … you have to address the problems and fix them.'
A recent Blade investigation found more than a sixth of about 800 houses built in Toledo in the last 15 years for low-income residents now are vacant. Of those, more than 100 are boarded up, stripped of plumbing and wiring, or otherwise gutted.
"What happens now to [these] projects?" Betty Kemper, an Ohio Housing Finance Agency board member, asked at a meeting Wednesday of the agency's multifamily committee.
The homes were built as part of a federal tax-credit program in which local developers can sell tax credits to investors, such as banks, to raise funds for acquisition, rehabilitation, and construction. Of the 21 projects built in Toledo since 1997, six have vacancy rates of a quarter or more.
IRS regulations require the agency to inspect the homes a minimum of once every three years, but The Blade found some of the homes had not been inspected in six years.
At the meeting, the Ohio agency's executive director, Doug Garver, told committee members the agency "failed to meet its responsibility" in some of the Toledo projects.
Agency officials have blamed the lack of inspections on Tom Evans, its sole employee in Toledo. He was fired in May, shortly after The Blade began requesting documents from the agency.
"There was a compliance breakdown in the Toledo region, but the issue is not systemic," Mr. Garver said. The agency has 13 "compliance analysts" charged with monitoring about 850 active projects, said Brian Carnahan, director of program compliance.
"We do rely heavily on their experience and professionalism," he said.
An agency memo discussed at the meeting said "windshield" [exterior] reviews have been conducted of all projects in Toledo.
While several projects that were identified by The Blade "have significant vacancies, the overall condition of the Toledo portfolio is very good," the agency believes.
The dire state of some of the houses has prompted the city to try to find other groups to take over a handful of the developments with the highest vacancy rates.
The memo outlines a five-point plan the agency intends to follow in response to the problems highlighted by The Blade. Among the steps: The agency will modify the process it uses for tracking and reviewing completed work and has assigned all Toledo projects to other employees for follow-ups and inspections.
All Toledo projects are to be inspected before the end of the year, according to Ohio agency.
Mr. Carnahan said problem developments with high vacancy rates or poor maintenance "will be given a correction period to make sufficient repairs.
"We will possibly be reporting many of these units to the IRS as should have been done, quite frankly, some time ago," he said.
Board member Ms. Kemper asked, "Is there any way we can contribute in some way to rectifying what happened?"
After meeting with the city and developing a plan, the agency will determine what role the state should play, Mr. Garver said.
On Monday, officials from the Department of Neighborhoods will meet with the Ohio Housing Finance Agency, as well as representatives from the National Equity Fund, Ohio Capital Corp. for Housing, and Toledo Lucas County Land Bank, according city spokesman Jen Sorgenfrei.
The state housing finance agency maintains, however, that the lack of inspections in Toledo were isolated; it said in a random review it found only six active projects outside of Toledo that were overdue for inspection.
The agency also tried to deflect blame for the poor condition of some of Toledo's most troubled tax-credit developments. "Timely inspections … may have given OHFA an early warning of the impending vacancy issues but likely would not have changed the eventual outcome," according to a portion of the memo written by Bruce Velt, director of internal audit for the state agency.
Ms. Kemper added after the meeting ended: "I want us to fix what we failed to do. Things happen, but then you have to address the problems and fix them. ...We're not just going to sweep them under the carpet."
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