COG to assume control of Hickory Housing Authority after COG finds financial, administrative failures

The Western Piedmont Council of Governments will take operational control of the Hickory Housing Authority effective July 1, 2025, following a council-directed takeover after an internal review found severe financial and administrative problems, Executive Director Anthony Starr told the Hickory City Council on June 17.

Starr said the housing authority currently administers housing choice vouchers but that its voucher program has been operating well below capacity. "After reviewing and auditing all the tenant files, there are currently 267 vouchers in current and use out of the potential 556 vouchers. That reveals an actual lease rate of about 48% of the of the vouchers being utilized," Starr said. He told the council the authority previously reported a lease rate near 60%.

Why it matters: The housing authority holds vouchers that provide rental assistance to low-income households; underuse of those vouchers means eligible families may not be receiving federal assistance city officials say there is capacity to distribute.

Starr told council staff reduced the housing authority payroll from about 14 employees to a single employee after the authority's public housing units were transferred to a nonprofit called New Dimensions in February 2017. He said New Dimensions subsequently terminated its management agreement and now owes the housing authority $278,000; the housing authority filed suit on June 6 to collect that amount. "Now this is a point that gets confused a lot in the public ... the former Public Housing Authority units in various neighborhoods in the city were transferred to a nonprofit called New Dimensions back in 02/2017," Starr said. "So the Hickory Housing Authority doesn't have any role now with, overseeing those housing units."

Starr said the review also uncovered improper payments to landlords. "We've also identified about 14 landlords who received excessive payments totaling $32,000 due to poor program administration. We've collected most of that balance now and, should be getting the rest of it hopefully soon," he said.

Starr described the housing authority's current cash position as constrained. "With the outstand that with the outstanding bills owed by the housing authority, they're about a $174,000. That doesn't include the monthly bills where we make rent payments on behalf of the tenants," he said, adding that most cash remains designated for tenant rent payments and there are no unrestricted reserves.

Council members praised the COG team's work. Mayor Hank Gess said the council appreciates the "extraordinary progress" by the COG and the housing authority board. Council members singled out local residents whose complaints prompted reform; Anthony Starr and staff credited that public pressure with prompting the takeover and cleanup.

Starr described near-term operational steps: the housing authority posted notices May 22 inviting New Dimensions residents who have lived in units at least 24 months to apply for a housing choice voucher; approximately 60 such applicants had applied by the council meeting, and applications are open through June 30. Starr also said the COG will begin issuing vouchers from the waiting list starting in July but warned that the authority cannot issue all available vouchers at once because of financial limits and a shortage of available rental units.

Starr said the waiting list had been as large as about 2,000 families; after a file review and removal of nonresponsive applicants the list now stands at about 367 families. He said the COG has initiated a required financial audit with Loudermilk and Church, the auditors based in Morganton, and that the audit will be presented when complete.

Starr closed by noting the HUD-approved transfer of the housing authority to the Western Piedmont COG, effective 07/01/2025. "So as you recommended and adopted, the US Department of Housing and Urban Development has approved the transfer of the Hickory Housing Authority to the Western Piedmont Council of Governments with an effective date of 07/01/2025," he said.

Next steps: Starr told the council the COG will continue audits, pursue the $278,000 collection action, and begin controlled voucher issuance to qualified households on the reduced waiting list. The housing authority board will meet through June 30 as operations transition to the COG.