Legal Services NYC Releases Internal HUD Audits Revealing Chronic Rent Miscalculation, Widespread Mismanagement of Section 8 Project-Based Rental Assistance Housing 

New York, NY – Legal Services NYC has obtained never-before-released internal government audits of the private property managers who run Project-Based Section 8 Rental Assistance (PBRA) in New York City, a program that provides rental assistance to nearly 150,000 New Yorkers citywide. The audits reveal what tenants have long known to be true—that private property managers are routinely failing to administer this program in categories that impact tenants’ quality of life and ability to stay in their homes, including miscalculating rents, missing crucial filing deadlines, and ignoring tenants’ due process rights. Yet, these private property managers receive passing scores through HUD’s audit system year after year, continuing the cycle of mismanagement with tenants paying the price. 

“For months, I didn’t even know what my rent was because they weren’t even sending me the paperwork,” said Marisca Vasquez, a tenant who lives in a PBRA building in East Harlem. “They never answer the phone,” she said of her building’s management. “We don’t even know who the property manager is, and it’s completely unorganized. Management made me afraid to even ask questions.” 

Ms. Vasquez tried over the years to advocate for her rights to get her rent paperwork corrected to no avail. Her building has been audited three times since 2015. In all three audits, her property manager failed the “Tenant File Review Category.” Several of those failures included citations for miscalculated rent, and missing notices. 

“HUD knows that the private property managers of these buildings are violating tenants’ rights,” said LSNYC Senior Staff Attorney Molly Rockett, “These audits prove that. The worst part is that these property managers aren’t incentivized to change or correct their behavior, because they know they can get away with it. They don’t face any real monetary consequences. They just rack up violation after violation, year after year, audit after audit, and meanwhile, they’re still getting paid in full.” 

“Subsidized housing is the foundation of our social safety net,” Rockett continued. “The tenants who call these buildings home deserve dignity, and that means real enforcement options and consequences when private actors violate their rights. Those don’t exist right now.”  

THE FINDINGS: 

In the nearly 1,400 audits obtained by Legal Services NYC spanning hundreds of developments over the past ten years, we found: 

• A staggering 94% of buildings failed the category with the most impact on tenants—the “Tenant File Review.” This category involves a granular review of several randomly selected tenant files, in which the auditor will check the work of the property manager in calculating rent and managing the subsidy. These failures are especially disturbing because they strike at the heart of the mission of PBRA housing: to give tenants an affordable place to live. Tenants who cannot afford their rent due to a miscalculation, or who don’t even know what their rent is due to a missing notice, are sent careening towards eviction court through no fault of their own. 

• Most PBRA developments were rated ‘Satisfactory’ or passing scores—even as they failed in core areas like rent calculation, subsidy recertifications, and respecting due process—areas critical to whether a tenant can remain in their home. In fact, according to data from the Housing Data Coalition and the Right to Counsel Coalition, PBRA landlords have filed more than 34,000 eviction cases in NYC since 2016, the majority for nonpayment likely stemming from subsidy errors and paperwork failures by management. And because of the layers of privately contracted oversight, tenants often have no clear way to challenge or resolve these mistakes, leaving them with no clear path to correct errors that can cost them their homes. 

• Although property managers are responsible for processing subsidy paperwork, tenants report unanswered emails, closed office doors, and chronic lack of communication. Too often, a subsidy will be cancelled in error, and the tenant is not informed until months later, when they are told they owe unaffordable back rent and after the property managers have filed an eviction.  

• Additional analysis of city records show that nearly one in four properties has been cited for hazardous or life-threatening conditions for open housing code violations like mold, leaks, and broken elevators. Yet audits — which often give heavy weight to “general appearance” — still allow these properties to pass. For tenants, this means living with unsafe and unhealthy conditions while their landlords are effectively rewarded with a clean bill of health.  

Worse still, there is often no action taken to rectify persistent failure citations. HUD has subcontracted the responsibility to conduct these audits to a private contractor called CGI, yet many buildings receive repeat violation findings year after year with seemingly no consequences. Tenants are trapped in the middle, dealing with unreliable and often absent property managers who at any moment could make an error or oversight that would destabilize their lives. 

PROJECT-BASED SECTION 8 RENTAL ASSISTANCE (PBRA) 

PBRA serves more than 2 million people nationwide and nearly 150,000 tenants in New York City. Similar to tenants in other public housing like New York City Housing Authority (NYCHA), tenants living in PBRA housing are required to pay 30% of their adjusted income towards rent and in return receive safe, habitable, stable housing. 

Unlike other public housing options, however, PBRA housing is privately owned and managed. For that reason, property managers have enormous power over tenants’ rent, subsidies, and housing conditions, with little meaningful accountability. These private owners and managers are supposed to be overseen by the U.S. Department of Housing and Urban Development (HUD). Instead, HUD subcontracts the program to the state’s Housing Trust Fund Corporation (HTFC), a public benefit corporation managed by the NYS’s Department of Homes and Community Renewal (HCR), who has further subcontracted out their responsibilities to another private actor, CGI, Federal Inc. 

“These findings make clear that property managers are failing tenants on the most basic responsibilities — such as calculating rent correctly, keeping apartments safe, and making critical repairs — yet they continue to pass federal audits,” said Ashley Viruet, Deputy Director of Manhattan Tenants’ Rights Coalition at Legal Services NYC. “Families who are already struggling to make ends meet should not be pushed into debt or risk losing their homes because of management’s mistakes. HUD and state officials must ensure stronger oversight and real accountability so that tenants are not left paying the price for private mismanagement.”