HUD, Houston in High-Noon Standoff

Federal officials threaten to withhold millions if city doesn't compensate evicted tenants

AFTER 20 years of renting a beat-up townhouse apartment on Houston's westside, Mike Lucid was put out on the street in 1993.

Mr. Lucid, along with five other families at the Manor West complex, was summarily evicted without compensation when the owner decided to renovate with federal funds secured by the city.

Now Lucid stands at the center of a high-stakes political shoot-out between federal and city officials.

Federal housing officials say Houston is guilty of ignoring tenant law. Texas's largest city counters that it is being unfairly dragged into a brawl with muscle-flexing bureaucrats who had better know when to back off.

Federal officials have threatened to cut off up to $37 million in community development money. But last month, the Houston officials blinked first. They forced the developer to pay $48,000 in compensation owed to tenants. But that is only about one-third of the amount owed by law.

Uncompensated tenant eviction happens nationwide with alarming regularity, say past and present US Department of Housing and Urban Development.

Typically, a developer receives federal money to rehabilitate a housing complex. The tenants, often poor, are left to find new housing with no help from the government officials whose renovation project left them homeless.

"If someone wanted to investigate, they would find that every major city is having major problems - New York, Atlanta, Los Angeles - the list goes on," says Harold Huecker, who headed HUD's Washington, D.C., Relocation and Real Estate division for 18 years before retiring last year.

Deep staff cuts at HUD over the past 15 years have rendered the housing enforcement agency paper thin. Huecker says that the number of HUD officials nationwide knowledgeable about relocation law has dropped to less than 25.

But while most relocation cases are quietly solved between HUD and city officials, the situation in Houston has reached a peak.

Just a month ago, the Feds took the unusual step of sending a letter to Houston Mayor Bob Lanier threatening sanctions against the city because of its "failure" to pay an evicted tenant named Mike Lucid, or provide him with "correct or helpful information." It was the third letter of its kind in a little over a year, say HUD officials.

"It's a question of whether the city did something in a timely manner," said Jim Broughman, director of HUD's Washington D.C. office of Block Grant Assistance, whose projects often force tenants out of apartment and receive relocation aid. "The city [Houston] has had problems in the past on this issue."

David Walden, Mayor Lanier's chief of staff, admits that Houston could have done a better job on the Lucid case but bristles at the suggestion that it is part of a "pattern," or that HUD will carry through with its threat to withhold millions in community development funds.

"If some regional office wants to start applying sanctions to a local governments they best hope that that doesn't work in reverse either," Walden says.

Federal relocation laws were born in the early 1970s after a slew of grim housing studies demonstrated how reckless urban renewal projects of the 1950s and 1960s evicted thousands of people out of older city neighborhoods. The law requires cities to pay anyone removed from their homes because of a federal project.

"There were so many hardships caused by the urban renewal projects, that the government was pressured, rightly, to correct the situation," said John Davis, a HUD official in Fort Worth, Texas.

With two weeks notice, Mike Lucid became one of those hardship cases. In late-1993, Robert Bobinchuck, the apartments' owner and a local developer, received federal money to renovate Manor West's 200 units through a now-defunct city rental rehabilitation program.

But Bobinchuck pushed Lucid and five other families out of Manor West because their incomes were slightly above the $19,020 maximum to qualify them as a low-income residents.

Federal tax-credits are given to developers for each apartment filled by someone on a low-income.

A HUD official called Bobinchuck's actions "greedy." The Houston developer did not return phone calls.

Besides receiving $585 moving expenses, Lucid was entitled to 42 times the difference between his rent at Manor West and the rental cost of a new apartment, or about $6,720.

"The city wasn't going to pay until I complained to HUD and they pressured the city," said Lucid. In June, he received one-third of the amount promised by law,16 months after it was due.

The payment was made after HUD sent Mayor Lanier a second letter on the case, and Bobinchuck paid the city $48,000 in relocation fees.

Former Relocation Director Huecker says that regardless of whether the developer complies with the law, the city has a contractual responsibility with HUD to insure relocation monies are paid.

"The city of Houston is trying to palm this off on the developer - this is typical in many cities," says Huecker.

Expressing a common complaint by city officials, the Mayor's top aide says,"It's not that they didn't get anything," Walden says. "This was more money than you envision paying them in expenses, or enough money for a deposit."

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