Audit of the New York City Department of Housing Preservation and Development's Enforcement of the Housing Maintenance Code

The City of New York
Office of the Comptroller
Bureau of Audit

Executive Summary

BACKGROUND AND AUDIT OBJECTIVE

The Department of Housing Preservation and Development (HPD) enforces the New York State Multiple Dwelling Law and the New York City Housing Maintenance Code in the more than 110,000 privately owned multiple residences in New York City. HPD housing inspectors visit privately owned buildings to investigate tenant complaints. After they find conditions that violate housing standards, HPD issues Notices of Violations (NOV) to building owners. NOVs direct owners to correct the violations by a specified "Correction Date" and to certify that this was done by returning a form by the specified "Certification Date." The NOV states that the landlord is subject to penalties if the violations are not corrected and certified as corrected by the specified dates. Additional fines, penalties, and/or imprisonment are also prescribed for false correction certifications. The Housing Maintenance Code classifies violations as either class A, B, or C, depending upon the hazard involved. Violations deemed immediately hazardous are designated "Class C" and must be corrected within 24 hours.

If landlords ignore NOVs and do not correct the violations, HPD may initiate litigation, seeking a court order to correct the problem and/or penalties against the landlord. Tenants, too, may initiate litigation. In addition, for conditions that endanger the health and safety of tenants, HPD may arrange for an emergency repair and then bill the landlord for the cost plus a 15 percent administrative fee. If the owner fails to pay, HPD can place a lien on the building and collect rents to recover the repair costs. From fiscal year 1990 through fiscal year 1994, HPD billed owners $48.5 million for the cost of emergency repairs; it recouped $34.1 million (70 percent) of the amounts billed.

The City's Administrative Code specifies that to enforce penalties against owners who do not correct and certify the correction of violations, HPD must initiate litigation and obtain judgments against the owners in the Housing Part of the Civil Court. Because HPD does not have the legal staff to take landlords to court for every NOV issued, it has difficulty penalizing landlords for not correcting violations. HPD has for the past 12 years unsuccessfully sought State legislation that would grant it the power to adjudicate NOVs in the same way that NYC's Parking Violations Bureau adjudicates parking violations. Such legislation would allow HPD to impose, docket, and enforce civil penalties for violations without requiring it to go to Housing Court to obtain a judgment. HPD officials have told us that prospects for future passage of the bill are dim.

The objective of this audit was to determine whether HPD is effectively enforcing the Housing Maintenance Code.

FINDINGS AND RECOMMENDATIONS

HPD Does Not Know Whether It Is Effectively Enforcing the Housing Code

In enforcing housing quality standards, HPD's primary goal should be to get building owners to correct Housing Code violations. However, we found that HPD does not have any method or measurement process to determine whether the it is achieving such a goal. While HPD measures and reports statistics about its code enforcement activities--such as the number of complaints received, the number of inspections performed, and the number of violations issued in a given time period, these indicators do not provide information about the effectiveness of its activities. Specifically, HPD does not measure whether its activities lead to increased compliance with the Housing Code or, in other words, whether inspections or NOVs result in owners making needed repairs. In short, the HPD does not know whether it is effectively enforcing the Housing Code.

For example, HPD measures how many violations are removed from its inventory of violations each year. For fiscal year 1994, HPD reported in the Mayor's Management Report that a total of 342,000 violations were removed. However, "Violation Removed" is not an indicator of program effectiveness because it does not necessarily mean that the violation was corrected. For example, a violation can be removed based on a certified statement from the owner attesting to the completion of repairs; many of these statements are false. In addition, violations that are removed from the inventory in a given year may not be the same as those issued in that year. Indeed, in fiscal year 1994, HPD reported that it issued 298,000 violations and removed 342,000 violations. These statistics give the public a misleading picture of the program's achievement: of the 298,000 violations issued during fiscal year 1994, 229,362 violations (77 percent) were still outstanding at the end of the fiscal year.

To determine whether violations are corrected, HPD would have to follow up on the violations it issues. This would be difficult, however, because borough code enforcement offices have experienced substantial budget cuts over the past ten years. In addition, the productivity of inspectors has fallen. In fiscal year 1984 each inspection team performed an average of 10,350 inspections and reinspections, versus only 4,620 per team in fiscal year 1994. But, despite the cutbacks to HPD's personnel budget, and, in fact, because of them, it is essential that HPD develop performance indicators to measure the effectiveness of its housing enforcement efforts. Such indicators would give public officials in charge of resource allocation an accurate portrayal of how successful the program is so that they can use this information to make budgetary decisions. This type of information, if it had been available, might have prevented some of the budget cuts that were imposed on HPD.

Other Cities We Surveyed Have a Formal Process to Determine Whether Violations Have Been Corrected

We contacted the administrators of housing inspection operations in nine U.S. cities to find out whether and how they measure the effectiveness of their enforcement efforts. In contrast to New York City, all nine cities that we surveyed determine whether the violations have been corrected, as illustrated in the following table.

City	Does the city have a formal process to determine whether violations are corrected?
Baltimore	Yes
Boston	Yes
Chicago	Yes
Houston	Yes
Miami	Yes
New Orleans	Yes
Philadelphia	Yes
Pittsburgh	Yes
Washington, D.C.	Yes

The results of our survey indicate that monitoring whether violations are ultimately corrected is a common practice that is crucial to measuring the success of code enforcement activities.

According to Our Measurement of HPD Effectiveness: Forty-three Percent of Immediately Hazardous Violations Still Existed an Average of One Year After They Were Identified by HPD Inspectors

Because HPD does not measure its effectiveness, we did such an exercise, restricting it to the most hazardous violations identified by HPD for conditions other than lack of heat and hot water.

We randomly selected a statistical sample of Class C "immediately hazardous" Housing Code violations[1] identified by HPD inspectors during fiscal year 1994 that were still listed on HPD's database as of July 12, 1994. In February and March 1995, we visited the residences and found that 43 percent of the violations we inspected were not corrected and 57 percent were corrected. Accordingly, we project that 13,889 immediately hazardous violations identified during fiscal year 1994--which, according to the Housing Maintenance Code, should have been corrected within 24 hours--still existed seven months after the end of the fiscal year. On average, the violations were at least a year old at the time of our visits. As a result, thousands of tenants continue to live in conditions that are immediately hazardous to their health and safety. The uncorrected violations we visited included peeling lead paint in apartments where children under age seven reside, broken plaster, and rodent infestation. Appendix 2 of this report describes the types of conditions we found. Photographs of those conditions appear in Appendix 3. [not included in electronic edition]

New York City Is Less Effective Than Other Cities in Correcting Housing Code Violations

The 57 percent correction-of-violations rate in NYC is lower than the correction rate of any of the cities we surveyed. Four of the nine cities we surveyed have processes in place that enable them to evaluate effectiveness in terms of the percentage of violations that are corrected. We contacted the administrators of code enforcement programs in these four cities to determine the percentage of violations--for conditions other than lack of heat and hot water--that are corrected. Overall, NYC has the lowest correction rate, as shown in the following chart.

Percentage of Violations Corrected
in Various U.S. Cities

Baltimore	92
Chicago	92.5
Philadelphia	85
Pittsburgh	85*
New York	57

* Pittsburgh's correction rate goes up to 95 percent after remaining cases are litigated.
Source: Survey of Administrators of Housing Code Enforcement Programs, March 1995

Each City differs in its responsibilities and approach, and has resources or legal tools that are not or may not be available in NYC. The point is that each other city, unlike NYC, has a reinspection process in place to determine the outcome of its initial actions, which does or could enable each city to measure effectiveness. In contrast, NYC, which lacks such reinspection and feedback mechanisms, can easily be fooled into thinking that it is the mere quantity of existing processes (i.e. how many inspections, or reinspections, were performed, how many NOVs were issued) that affects its performance, but it will never know for sure because it does not monitor and/or measure performance like the other cities. Absent such mechanisms, NYC not only lacks information on how well it is doing, but, more importantly, lacks information needed to fine tune or refine the program, to obtain more or different resources, or to assist in encouraging the passing of needed legislation.

Multiple Inspections and Repeated NOVs Do Not Necessarily Achieve Any Results

HPD's database of violations validates what we found in our field visits: complaints are investigated, problems are found, and violations are issued; however, many repairs are not made. We examined three buildings with hundreds of violations on record. HPD's records indicate that inspectors identify the same conditions repeatedly, and that they issue multiple NOVs for the same uncorrected conditions. However, this just adds to the count of activities performed and obfuscates what the practice indicates: that HPD is not always effective in attaining a goal of achieving owner compliance with the Housing Code. Unlike other cities, which have formal processes for following up on existing violations, NYC, in effect, ignores violations that inspectors have previously identified and issues new violations repeatedly.

For example, at 406 West 129th Street, HPD inspectors repeatedly inspected each of 131 previously cited conditions in the building, resulting in new NOVs being issued for these conditions.[2] A total of 356 violations were issued for these 131 conditions. One of these conditions involved inadequate gas being provided to kitchen fixtures. The problem was investigated and, on March 25, 1988, a violation was issued. On April 8, 1988, another inspection was done and another NOV was issued. Between June 20, 1988, and November 12, 1992, 12 additional NOVs were issued for the same condition. Thus, over a four and a half year period 14 separate inspections were done for the same condition. In another apartment a violation for a missing smoke detector was first noted by an inspector on January 19, 1988. On March 3, 1988, another NOV was issued for the same violation. Between August 1, 1988, and September 14, 1992, the same problem was noted ten more times, for a total of 12 NOVs in almost five years. In another apartment, an NOV for a leak near a light fixture--an immediately hazardous violation--was first issued on March 7, 1988. Two more NOVs were issued for this condition within the next month. A total of four NOVs were eventually issued.

HPD's practice of repeatedly inspecting the same condition, without necessarily getting the condition corrected, indicates that HPD's processes for enforcing the Housing Maintenance Code, while not very effective as a whole, can be totally ineffective when owners simply ignore NOVs. Given its current authority, HPD does not have the resources to penalize landlords for not correcting violations. The City's Administrative Code specifies that owners are subject to certain penalties when the owners do not correct violations. However, HPD does not have the authority to collect these penalties without litigation. To enforce penalties, HPD must obtain judgments against the owners in the Housing Part of the Civil Court. Because HPD does not have the resources to initiate litigation against most building owners for uncorrected violations, it is not likely that owners will be penalized for ignoring the NOVs received from HPD.

We believe that, unless HPD begins to define the correction of violations as its overall goal, the agency will continue to measure the success of its Housing Code enforcement efforts in terms of the number of activities it performs. This leads to an ironic situation. Indeed, given the massive number of inspections conducted and NOVs issued at the previously cited buildings, HPD appears to be very effective, if only by virtue of the quantity of its activities. In reality, however, in such cases HPD is merely "spinning its wheels," since the practice of repeatedly inspecting the same condition without the condition ever being corrected indicates that Housing Code enforcement efforts are not successful because owners ignore NOVs. If HPD monitored the outcome of previously issued NOVs, scarce inspection resources would not be wasted on repeated inspections of the same condition. Instead, other measures could be taken. While HPD may not have sufficient resources to make emergency repairs or bring landlords to court for every uncorrected violation, this does not mean that the alternative is for HPD to inspect a condition repeatedly, each time issuing a new NOV. Rather, the alternative is that HPD identify this problem by a system that measures program effectiveness, and then use such measures to lobby for more resources or better enforcement authority.

Other Symptoms of a Failure to Monitor The Outcome of Enforcement Efforts

As stated earlier, many building owners ignore NOV's with impunity, and merely face the prospect of accumulating more NOV's when they fail to correct violations. We found other problems that are equally illustrative of HPD's failure to monitor the outcome of violations that HPD inspectors identify:

1. When owners certify that they have corrected the problem, but submit certification statements after the due date, 27% of these late certifications are false. In our sample of violations, 33 had been certified as corrected after the certification due dates (which is why the violations still appeared in HPD's database; certifications of correction which arrive at HPD before the required due date are removed from HPD's database). When we visited the various locations related to those violations, we found that 27% of those violations that were certified late as being corrected were not, in fact, corrected.

2. When owners do correct violations, 39% of them do not notify HPD. In our sample, we found 54 violations that had, in fact been corrected by the owner, but 39% of them were not reported to HPD as required. This illustrates the "other side of the coin" of the problem, mainly that while many owners do not feel compelled to correct violations, even when they do, many do not deem it necessary to tell HPD.

3. As of July 12, 1994 HPD had more than 66,000 peeling lead paint violations in its inventory. Since HPD does not know and does not measure to what extent its violations are corrected, HPD does not know the correction rate for these types of violations either. These are of particular concern because they relate to young children who live in such premises and who may be at risk of lead poisoning.

HPD Should Inform Tenants of Their Rights in Getting Violations Corrected

When we visited residences to determine whether the specific violations in our sample had been corrected, we spoke to tenants who related their experiences in getting problems resolved. Some tenants told us that they repeatedly call HPD and that, in their words, "an inspection occurs and nothing gets done." Most tenants did not know that they could initiate, on their own, actions in Housing Court to obtain a judge's order to repair the conditions that resulted in the violations. In addition, most of the tenants did not know about HPD's Emergency Repair Program.

HPD should inform tenants that it has limited resources and that it cannot take each owner to court in an effort to have every violation corrected. HPD should advise tenants of their right to initiate actions in Housing Court where judges can order owners to make the repairs and impose penalties against owners who do not comply with these court orders.

CONCLUSIONS

The goal of HPD's Housing Code enforcement efforts should be the correction of violations, by owners for the most part. Under its stated goal, "To enforce compliance with housing quality standards," HPD monitors its performance by measuring activities, such as calls received, inspections performed, violations issued, etc., and strives to perform more inspections per inspection team per year. But these numbers are useless pieces of information and are irrelevant if it is not known whether the activities lead to the correction of violations. More perversely, this type of measurement system can actually lead to the design of processes and procedures that are wasteful, inefficient, and ineffective. Until HPD begins to monitor and report the outcome of these activities in terms of the number and percentage of violations corrected, the effectiveness of the program will be ignored. Inherent problems with the program will, therefore, not be addressed and corrected.

Performing inspections without following-up on violations issued undermines the effectiveness of Housing Code enforcement efforts. Such a practice--which according to the administrators of housing code enforcement programs in other cities, is unique to NYC---fosters the perception among both tenants and owners that City government is ineffectual in fulfilling its responsibilities, and that the Housing Code can be ignored with impunity. Moreover, it fosters apathy and frustration among tenants who continue to live in hazardous conditions even after the City has inspected and identified conditions violating City and State laws on minimum housing standards. HPD may report that it "responds" to complaints, but its actions do not ensure that what should be the program's real goal is achieved and that violations are corrected.

HPD does not have the resources to initiate litigation against every owner for every uncorrected maintenance and repair violation. However, if owners believe that they will not be penalized for not correcting violations, they are more likely to ignore the NOVs they receive from HPD. Therefore, it is imperative that HPD continue to seek passage of legislation that would give it the authority to adjudicate NOVs without having to go to housing court to obtain judgments. In addition, the budget for HPD's Housing Code enforcement efforts has been cut substantially over recent years and, given the decline in housing inspector productivity over the same period, it is more important now than ever that HPD know where its efforts are working, and where they are not working. Measuring program effectiveness in the way we suggest would accomplish this. Such information could then be used to show legislators and other government officials the program's need for redesign, greater resources, or the need for legislation giving HPD greater authority to penalize building owners who disregard the Housing Maintenance Code.

The report makes the following six recommendations:

1. HPD should develop appropriate reinspection processes and performance indicators geared toward showing whether violations have been corrected, and whether these violations were corrected by the landlords or by HPD. To accomplish this, HPD should conduct reinspections of all Class C violations and a representative sample of Class A and Class B violations.

2. HPD should make these types of performance indicators public and include them in the MMR. The public and public officials would then have meaningful indicators to rely on when making decisions regarding Housing Code enforcement policy and budget allocations.

3. HPD should change its goal and objectives in the MMR, and redefine them more in terms of getting violations corrected, rather than in terms of merely "enforcing compliance." HPD should work with the Mayor's Office of Operations to accomplish this by the time the next MMR is issued.

4. HPD should continue to seek State legislation enabling it to adjudicate NOVs and issue and docket penalties for uncorrected violations without having to obtain judgments in the Housing Part of the Civil Court. To accomplish this, HPD should use the results of this report to convince legislators that HPD needs greater enforcement authority to effectively achieve owner compliance with the Housing Maintenance Code.

5. HPD should inform tenants of their right to take their landlords to Housing Court when their landlords fail to correct the violations. Specifically, HPD should develop a printed flyer or booklet that would be handed out to tenants when inspections are performed.

6. HPD should reinspect sample of correction certifications and initiate litigation to penalize those landlords who submit false statements to HPD claiming they have corrected the violations. Such litigation should be publicized so that owners are informed that they cannot submit false certifications with impunity.

AGENCY RESPONSE

In its formal response to this report, HPD took strong exception to practically every aspect of the audit's methodology and conclusions. In her letter, HPD Commissioner Deborah Wright raised "three issues of concern about the audit methodology." In her letter, Commissioner Wright wrote:

"First, although the audit scope was specifically limited to C violations, heat violations, one of the most serious and egregious violations, was omitted. Heat violations receive intensive attention by HPD, and compliance is achieved in a very high percentage of the heat violations written. When heat violations are included, 92 % of the violations are corrected."

"Second, we were able to identify and review two-thirds of 65 violations that the audit indicated could not be verified. As detailed later in this response, our records indicate that 89% of the C violations mentioned in the audit were corrected."

"Finally, the audit fails to count as corrected the number of violations corrected through litigation brought by HPD's Housing Litigation Bureau. Although the audit goes into some detail regarding the many adjudication mechanisms that other cities have to enforce their codes and raise the percentage of violations that are written, it does address over 50,000 violations per year and is, in fact, a critical mechanism for ensuring correction."

In addition, HPD claimed:

• if emergency conditions are found by inspectors, the violation is referred to HPD's Emergency Services Bureau (ESB) "which will make the necessary repairs if the owner does not comply";

• that, although "Code Enforcement does not, at present, track all violations to removal," HPD "carefully monitors the status" of violations referred to the Emergency Services Bureau;

• that the comparison of the violation correction rate achieved in NYC with the correction rate achieved by other cities is "incomplete and misleading" because of the disparities between NYC's housing stock and the housing stock of other cities, the differences in the cities' code enforcement processes, the "staggering" contrasts in the cities' workloads, and the auditors' alleged failure to consider various aspects of HPD's enforcement process when calculating NYC's correction rate of violations;

• that, contrary to the audit findings, HPD's code enforcement efforts "are 89% effective, and when heat violations are included, Code Enforcement is an impressive 92% effective."

• that, in regard to the larger number of lead paint violations currently listed on HPD's database, "violations such as those covered in the audit are placed [issued] when there is no lead poisoned child under 7 years of age occupying the apartment. These are not the cases in which the City has experienced liability."

• that, in regard to the drastic drop in inspections and reinspections conducted per dollars budgeted to Borough Code Enforcement Offices for personnel, "The audit is misleading in simply claiming that inspectors are less productive without investigating the different nature of the inspections that are currently being performed."

Faced with the contrast between the audit's findings and HPD's response, and seeing no middle ground between the two, the casual reader could only conclude that either the auditors or HPD completely "missed the boat", but would probably not be able to decide who did. To help the reader decide and in order to present and fully discuss the agency's position on the matters presented in this audit, a separate section has therefore been added at the end of this report, entitled "Discussion of Agency Response."

It should also be noted that after an in-depth review of HPD's response, the Comptroller's Office has concluded that HPD's arguments are invalid and unconvincing, and that the audit's findings are correct. Therefore, except for one report section dealing with lead paint violations, this report is essentially the same as the draft that was submitted to HPD for its review and comments. Before forming a conclusion, the reader is encouraged to read the report, and then the "Discussion of Agency Response" section which begins on page 28 of this report. A copy of the agency's response is attached as an Addendum to this report.

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Notes

1. We excluded heat and hot water violations for reasons described in the Scope and Methodology section of this report.

2. Because heat violations can occur on two separate occasions--as when the owner does not provide adequate heat in November and then again in February--we did not include heat and hot water violations when determining the number of times one particular condition was repeatedly inspected.