Audit Report on the Department of Housing Preservation and Development’s Alternative Enforcement Program

The Department of Housing Preservation and Development (HPD) is the largest municipal developer of affordable housing in the nation. In November 2007, HPD implemented the Alternative Enforcement Program (AEP), which was created by Local Law No. 29 of 2007 and amended in January 2011 by Local Law No. 7 of 2011, in an effort to increase pressure on landlords of the City’s worst buildings to correct housing code violations and the conditions that caused the violations.

The AEP is intended to improve conditions in buildings with multiple dwelling units (buildings)¹ with serious physical deterioration by ensuring that emergency conditions are corrected and that underlying physical conditions related to housing code violations are addressed either by the owner or by HPD. The criteria for identifying the buildings that will participate in the AEP are set forth in §27-2153 (Alternative Enforcement Program) of the New York City Administrative Code. For a building to be discharged early from the AEP (within the first four months of being selected), owners must apply for an AEP Dismissal Request Inspection, correct the cited violations, provide required documentation to the City, and either pay all outstanding charges, including liens, for emergency repair work performed by HPD or enter into an agreement with the Department of Finance (DOF) to pay such charges and liens.

Audit Findings and Conclusions

HPD complied with the key provisions of Local Law 29 of 2007, Local Law 7 of 2011, and Section 27-2153 of the Administrative Code, except for performing the required quarterly monitoring of the buildings that were discharged for compliance within four months from being identified for the program.

HPD generally complied with the provisions relating to the building selection for participation in the AEP; notification to the building owners and tenants; and discharging for compliance only those buildings that met the criteria established by the local law. In addition, HPD complied with the provision to perform building-wide inspections of the buildings that were not discharged from the program within four months. Finally, HPD prepared and submitted the required reports to the City Council documenting the results of the AEP program and performed a study evaluating the effectiveness of the AEP, as required.

However, HPD did not ensure that a building’s compliance with all AEP criteria was documented for eight (20 percent) of the 40 sampled discharged buildings from Rounds 2 and 4. In addition, there is limited evidence that HPD adequately monitored all buildings that were discharged for compliance within four months from the owners’ notification of their buildings’ participation in the AEP. We found no evidence that some of the quarterly monitoring required by the local law was performed for a quarter of the 35 sampled buildings discharged for compliance within the first four months.

Audit Recommendations

To address the audit issues, we recommend that HPD officials should:

• Ensure that building summary information is generated for each discharged building at the time of discharge and maintained to document the building’s compliance with discharge requirements, including payment of the emergency repair charges.
• Ensure that all buildings discharged for compliance from the AEP within the first four months are referred to the appropriate unit to be monitored at a minimum of every three months for at least one year from their discharge date and that the required monitoring is sufficiently documented.

Agency Response

In their response, HPD officials agreed with the audit’s findings and recommendations.