HUD orders Chicago housing complex to correct security problems

The U.S. Department of Housing and Urban Development has ordered the owner of a Far South Side apartment complex where residents say they were harassed by the security company to submit a plan to correct the problem following a Reporter investigation.

It’s not clear what the plan entails. A spokesman for HUD would not elaborate on what steps the agency might take after evaluating the plan, which is due today.

Housing experts say it is rare for HUD to order corrective action plans. Among the steps the agency could take include asking the owner to terminate the contract with the security company, A-Alert Security and Investigations.

Residents at Concordia Place Apartments said A-Alert Security regularly harasses visitors and has them arrested by Chicago police, uses profanities and excessive force, and patrols the property with assault rifles and a German Shepherd named “Demon,” who has bitten at least one person, who had to be taken to the hospital.

In April 2015, 26 African-American residents and guests filed a federal lawsuit against security company owner Ricky Martinez, A-Alert, and DRE, Inc., which owns both the property and the management company, Promex Midwest. Two former residents have filed separate lawsuits.

The owner of Concordia Place, Dennis Egidi, declined to comment on what corrective action the company may take. But residents say they have already noticed an about-face in the way A-Alert and owner Ricky Martinez police Concordia.

“We rarely see them anymore,” Yolanda Walker, president of the Concordia Place tenants association, said this week. “You don’t see the dog, you don’t see the high-powered rifles, and you definitely don’t see Martinez. So they have slowed down.”

Still, some housing experts said HUD could have acted sooner to investigate complaints about the tactics employed by the security company at Concordia Place. They said the agency should do a better job monitoring subcontracts at its approximately 23,000 subsidized multi-family housing developments nationwide.

HUD does not review or approve subcontractors at the multifamily projects they subsidize. Owners and management companies must submit information to HUD showing that they have “business integrity, honesty and capacity to perform,” according to HUD regulations. But no such evaluation is conducted for security companies and other subcontractors.

If so, HUD might have discovered, as The Reporter did, that A-Alert Security didn’t have the correct state license—and neither did its owner Ricky Martinez—when he signed a security services contract with Concordia Place in Sept. 2011.

“What’s happening [at Concordia Place] is not surprising at all to me, and it shouldn’t be surprising to anyone else,” said Kate Walz, director of housing justice at the Shriver National Center on Poverty Law, which represents the Concordia Place tenants association. “HUD needs to do a better job of screening who these management agents are and who the security companies are before they let the owner enter into contracts with them.”

But Carol Galante, who served as HUD’s Deputy Assistant Secretary for Multifamily Housing Programs from 2009 to 2011, said the agency is too large to get into the business of monitoring subcontracts.

“It’s a huge government agency that can’t be in a position—and doesn’t have the resources—to micromanage,” said Galante, who also served as the Federal Housing Commissioner and now teaches at the University of California at Berkeley.

In fact, HUD doesn’t even directly oversee most of its subsidized multifamily housing stock. Instead, it subcontracts that oversight role to outside companies, known as Performance-Based Contract Administrators.

Those contract administrators are responsible for fielding and responding to tenant complaints, facilitating the payment of rent subsidies and conducting regular reviews of management companies.

Housing advocates said this set up keeps HUD too far removed from problems facing tenants in properties like Concordia Place, even though HUD pays its owner $3.2 million each year in rent subsidies.

“HUD would say, take those problems to the contract administrator,” said James Grow, Deputy Director of the San Francisco-based National Housing Law Project. “But tenants don’t always know who the contract administrator is. So, in some ways, it’s disingenuous for HUD to say this without a much more robust information campaign [for residents].”

Contract administrators also are not directly accountable to the public. The Atlanta-based non-profit National Housing Compliance, Inc., which is the contract administrator for most HUD Section 8 contracts in Georgia and Illinois including Concordia Place, referred The Reporter’s questions about the issues at the property to HUD’s regional office in Chicago. HUD has not yet responded to a public records request, submitted nine weeks ago, for documentation of the management reviews that National Housing Compliance is supposed to conduct at Concordia Place.

It’s not entirely clear if NHC, Inc. overlooked complaints from residents at Concordia Place about A-Alert, or if residents didn’t know to direct their complaints to NHC, Inc.

Either way, security concerns are particularly difficult to address in subsidized housing, Walz said, because HUD does not require owners to provide security and doesn’t have guidelines for what constitutes good or bad security. More guidance from HUD could help owners, tenants and advocates better understand and agree on the role of security at these developments, she said.

Galante countered that security at each development is different, making it an area that HUD shouldn’t try to regulate.

“I think you really want to be careful not to tie the hands of owners of these properties to get things done,” she said.

Advocates said the lack of direction from HUD, coupled with the agency’s lax oversight of security subcontractors, means that even if HUD demands that Concordia Place terminate their contract with A-Alert as part of the corrective action, A-Alert could still receive contracts at other HUD properties.

“I think that scenario is not only possible,” Walz said, “but it has happened” with other companies.