COMPTROLLER OF THE CITY OF NEW YORK
1 CENTRE STREET
NEW YORK, NY 10007-2341
ALAN G. HEVESI
January 6, 1995
Deborah C. Wright
Department of Housing Preservation and Development
City of New York
100 Gold Street
New York, NY 10038
Dear Commissioner Wright:
We are writing to alert you that our offices' research into your program for certifying landlord corrections of housing code violations demonstrates the potential for a total breakdown of the housing code violation process. In effect, landlords appear to have discovered that they can easily dupe the City to get violations removed from the record and to escape fines. Even more troubling is that HPD has failed to prosecute those landlords found to have cheated the system, thereby inviting more landlord fraud. We would like to request that you provide to us by January 20, a detailed plan to strengthen the process by which landlords are fined for false certifications.
Our research leads us to conclude that approximately 40,000 housing code violations were improperly swept from Department records last year, freeing those landlords from any possibility of Housing Court appearances or penalties. The Department's enforcement mission is being severely undercut and hundreds of thousands of tenants are being unnecessarily subjected to hazardous living conditions. In other words, on top of HPD's recent and drastic staff cuts, the work of the few remaining inspectors is being wasted.
Annually, about 100,000 housing code violations are "certified" by landlords as having been corrected. The HPD form utilized in informing landlords of violations and in the removal of those same violations from the record is called a Notice of Violation. Landlords are offered the one-time opportunity to initial those violations which they claim to have corrected. Unless re-inspected by your Department within 70 days, these violations are automatically removed from the official City record and cannot be subject to penalties.
In a recent written response to our request for information, HPD could not tell us how many re-inspections of certified violations are conducted annually (See the attached December 5 HPD letter). Nevertheless, information collected by our staff's visits to your borough offices in Manhattan, Brooklyn, and The Bronx indicates that, in fact, about 12,000 certified violations are re-inspected.* In the attached graph, you can see the results of our sample of re-inspections. Over the three boroughs, your inspectors judged that 40% of certified violations were falsely certified. We believe that our sample size, about 10% of all re-inspections per borough, is fair and representative. In all, your Department's letter acknowledges that about 5,000 mis-certifications are uncovered annually.
By law, each fraudulently signed Notice of Violation can bring a fine of up to $1000 or imprisonment for up to a year, and each false certification of a correction of a violation can bring a civil penalty of up to $250. This warning is printed on the back of the Notice (Attached). Yet the HPD December 5 letter was unable to identify any instances in which a penalty was sought against a fraudulent landlord. A borough Chief Inspector confirmed that no penalties for incorrect certifications were ever imposed.
To place the amount of apparently fraudulent certified violations into perspective, it is worth noting that last fiscal year, your inspection force cited 240,000 code violations. Our projection of 40,000 improperly certified violations per year is about 16% of your Department's entire output. Since you currently have about 200 inspectors, unscrupulous landlords last year effectively threw away a year's worth of inspections of 32 inspectors. As noted above, this is an especially unconscionable waste of staff in this time of severe budget cuts.
To further illustrate how far HPD has gone towards inviting fraud in the certification program, consider that inspectors are instructed to make only two unannounced attempts to re-inspect a building. If the inspector cannot gain access to the building after the two attempts, the landlord's certification is automatically accepted. No attempt is made by inspectors to require that the landlord allow access for the re-inspection.
Our research in this area uncovered yet another area in which wide-spread disregard for the law has both been abetted by HPD's failure to prosecute offenders and hampers enforcement. The reason that only 100,000 violations were certified out of a total of 240,000 cited in FY94 undoubtedly may lie in the large number of Notices of Violations which do not reach landlords. While at the borough inspection offices, our staff saw stacks of Notices of Violations which had been returned by the Post Office for incorrect addressee. The borough offices did not know the exact number of undelivered Notices, but it was clearly in the tens of thousands. Apparently, HPD does not have the correct registered address for building owners, which owners by law are required to register to the Department. For undelivered Notices, of course, the certification deadline listed in the Notice passes without a certification. Fining landlords for failing to register would eventually allow HPD to at least communicate with landlords.
We realize that due to budget constraints, the number of reinspections cannot be increased. Obviously, however, landlords will continue to make a patsy out of the Department unless action is taken against those landlords who are found to have made incorrect certifications. Moreover, HPD's greater use of tenant input for targeting re-inspections might make limited inspection resources more effective. Whatever your ultimate plan, we would appreciate your informing us of any action you plan to take, to restore credibility to the enforcement effort.
Alan G. Hevesi
Franz S. Leichter
1. HPD's December 5 letter
2. Graph illustrating sample results
3. Notice of Violation warning regarding fraudulent certifications
* The Chief Inspectors of Brooklyn and Manhattan also did not know how many re-inspections they assign their inspectors each year. The Bronx, however, was able to determine that 722 reinspections were conducted in calendar 1994. Informal counts were kept in Manhattan by clerical workers. In addition, we were able to project the total number of re-inspection by using the ratio of mis-certifications uncovered in our survey and the 5000 miscertifications acknowledged by HPD in the Department's December 5 letter.