MIAMI — When Caprice Brown and her three children were evicted six years ago from their rundown apartment in one of the most depressed areas of Miami, they were promised a sparkling new housing development that would revitalize the community.
Instead, they ended up in a single room of her aunt's already crowded house nearby. With little money for food and stripped of housing benefit vouchers, she slept on the floor while her sons aged 13 and 10, and her 11-year-old daughter shared the room's only bed. Then in January, she and her children moved into a private rental apartment.
Six years after the evictions, the 42-acre site in Liberty City that used to be their home remains demolished, fenced off, and abandoned.
Ms. Brown is among thousands of victims of one of the nation's biggest housing scandals, which saw millions of dollars of public money lost, squandered, or stolen while the Miami-Dade Housing Agency failed to deliver on promises of affordable new accommodations for its poorest citizens.
Hundreds of families were made homeless or simply disappeared from the system. They were waiting for help from an agency riddled by mismanagement and corruption, which is now the subject of a federal investigation that could have implications for low-income housing policy nationwide.
Meanwhile, the waiting list for public housing in one of America's most expensive cities for real estate has grown to more than 41,000 names.
"I'm angry about the lies that were told to us," says Brown. Her family was one of more than 850 uprooted when the agency pulled down the crumbling Scott Carver public housing project to make way for a partly government-funded revitalization project that was never built.
The stalled Scott Carver Homes project, for which the local authority accepted $35 million of government money, is the worst of many missteps dating back to 1998 that brought the agency to the attention of the US Department of Housing and Urban Development (HUD).
An audit released last week confirmed massive misuse of public funds, tax irregularities, and countless incidents of sloppy or suspicious recordkeeping. The agency, for example, employs only about 690 workers, yet 1,811 appeared on payroll records, 115 of them with Social Security numbers belonging to deceased individuals.
Another criticism was that at least $12 million was paid to developers, through a nonprofit corporation set up by the agency, for housing projects that were never started or were delayed. One developer, Oscar Rivero, faces criminal charges of taking $740,000 meant for 54 low-income houses in Little Havana to buy himself a luxury home in south Miami.
A second, Raul Masvidal, was arrested last Friday on charges of grand theft and organized fraud. Among his alleged crimes? Skimming $150,000 from public money to buy himself a sculpture of a watermelon.
HUD secretary Alphonso Jackson's response was to send a "hit squad" of seven investigators to Miami, and he announced last week that he intends to take the rare step of ordering a federal takeover of the agency's finances and services. Miami-Dade Mayor Carlos Alvarez is resisting, claiming that the county had turned a corner by replacing the agency's leadership with a new director of housing and team of experienced advisers.
"We've taken the most aggressive steps we possibly can, and I don't believe the federal government can do a better job," Mr. Alvarez said in a statement.
Those steps include new plans for the Scott Carver site that would see all 850 of the demolished units replaced. The original plan was to rebuild less than half that number.
The tug of war, however, goes far beyond local authority complacency and cuts to the heart of government policy toward public housing for the nation's poorest residents, experts say.
When it was set up in 1993, the Hope VI program was designed to inject federal funds into areas where public housing was "severely distressed," such as Liberty City, and build new developments mixing private and public accommodation.
But only 60 of the 237 projects funded with about $5.7 billion of government money nationwide have been completed. Meanwhile, many displaced families who were given vouchers to help them pay rent in the private sector lost their benefits through complications in the system.
Voucher problems exacerbated delays to Hope VI projects, says Chuck Elsesser, a board member of the National Low Income Housing Coalition and an attorney with more than 30 years' experience in affordable housing legislation. "When you look at the projects around the country, you ask two questions: Did it get built, and did the people come back?" he says. "A few do, but a lot get lost. In a short space of time families who had been living without any problems for decades were losing their subsidies and becoming homeless.
"Even with vouchers, you've got to have a landlord that will accept them. In Miami, they were sending people out into one of the hottest housing markets in the country. It didn't work here, and it did work in other areas," Mr. Elsesser adds.
Now some are urging Congress to do away with the program altogether. "Neither the housing agency nor HUD has done right by the people when it comes to Hope VI," says Tony Romano, organizing director of the Miami Workers Center, which is supporting displaced families. "The plan from the beginning was a failure. It's not about finishing what they started. It's time for a whole new plan."
Mr. Romano cites a study by the Research Institute for Social and Economic Policy at Miami's Florida International University that shows that more than half of 187 former Scott Homes residents interviewed lost their benefits, known as Section 8 vouchers.
Donna White, a spokeswoman for HUD, acknowledges problems but says it is unfair to judge the program by what happened in Miami. She points to Atlanta, Chicago, and Tampa, Fla., as areas where projects have been successful. "In some cities it hasn't been a nightmare. In some it has," she says. "I wouldn't like to paint a broad stroke on the program."
The program was never intended as an instant fix, says Susan Popkin of the Urban Institute's Metropolitan Housing and Communities Center, who has studied five Hope VI projects nationwide. "In Chicago, it started out a mess but over time it began working. But it took a strong support system and a lot of oversight to get there," she says.