On March 23, Wendell Walters plead guilty to two counts of racketeering and bribery. As the assistant commissioner for development at the city’s Department of Housing Preservation and Development, he oversaw billions of dollars in city contracts to build and repair the city’s vast stock of private affordable housing. The projects only grew over the past decade as Mayor Bloomberg launched a program to create or rehabilitate some 165,000 units of affordable housing.
During that time, the kickbacks to Walters also grew, totaling some $2.5 million over the course of a decade involving at least 10 different affordable housing developers in the city. Some payments were made in coffee cups, others in thick envelopes stuffed into Walters’ golf bag as he and the builders took in a round of golf. Among the gifts received was a brownstone on 139th Street in Harlem, free renovations to the townhouse and a honeymoon in Greece.
When he was arrested last October, Walters was paraded in front of the Brooklyn Federal Court House. Like so many perps, he was caught by surprise and still wearing his morning clothes, a black fleece pullover and black sweatpants. Tall and handsome with a shaven head, the 49-year-old Walters looked shocked, embarrassed, dismayed.
So was Matthew Wambua. Appointed exactly a year and two days before Walters’ plea deal, the new commissioner of HPD looks remarkably like his former colleague—trim, tall, of clean pate. He has spent a good deal of his term trying to clean up after Walters, implementing new measures to bring transparency and accountability to his agency. With an an annual budget of more than $1 billion, HPD touts itself as the largest municipal housing agency in the country.
“I will be the first one to tell you we are not perfect—far from it,” Mr. Wambua said during a recent interview in his office overlooking the on-ramp to the Brooklyn Bridge. “But we take these matters extremely seriously and are working everyday to address them.”
But the actions of Walters and other bad actors at the agency and at its work sites has brought considerable scrutiny to HPD. It has led to exposés and editorials, hearings and harangues. The most significant consequence so far is a new bill at the City Council, Intro 730. Known as the HPD Transparency Act, the bill requires the department to make public a number of its operational procedures. Sunshine is the best disinfect.
It might also be a disaster for the department. As currently constituted, the bill would impose millions of dollars in costs on the agency and, more significantly, the firms that do the building for it. The big dog developers would have limited problems covering these costs—though it would still eat into the funds available for building new affordable housing projects—but the smaller firms, the new businesses and the women- and minority-owned firms, argue they could not afford the onerous wage reporting requirements within the bill.
“We’re about housing, but we’re also about economic development, about lifting up the community,” Mr. Wambua said of his agency. “We’re building housing in the community, and, as much as possible, we’re building it with firms from the community, we’re building it with workers from the community.”
This may become less and less the case. The bill passed the council in July, but the mayor vetoed it the following month. Today, the council is expected to override the veto, and it will go into effect on January 1.
When that happens, housing insiders fear it could open HPD up to renewed attacks from labor unions, as they interrogate the books of the department and its contractors and developers, looking for any opportunity to score political points and, more importantly, win work. The unions have never much bothered with affordable housing jobs. The work is neither very technical or sexy. But as a recession that has eviscerated the industry drags on, any job is a good one.
This may help explain why some of the city’s biggest construction union groups, including the Building and Construction Trades Council, the District Council of Carpenters and the Mason Tenders District Council, helped to conceive and deliver Intro 730 at the council. “Doesn’t it seem strange to you that unions that have never had any involvement with HPD have suddenly taken such a keen interest in it?” one affordable housing expert said. “And not just the legislation, but almost every news account, where there is a complaint about HPD, there is a union rep there doing the complaining.”
“Somebody has to have the courage to stand up, blow up HPD and rebuild the way we do affordable housing,” said Richard Weiss, communications director for the Mason Tender’s District Council. He was referring to mayoral candidates, but he just as soon could have been talking about his guys.