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San Francisco Housing Authority says HUD scoring issue cured; consultants flag Plaza East reserve shortfall
Summary
SFHA CEO Tanya Lettishu and HUD technical-assistance consultants told the commission SFHA’s FY2022 Public Housing Assessment System (FAS) score of 55 resulted from late financial reporting and has been cured; consultants recommended stronger lease enforcement and vendor oversight after finding Plaza East lacks reserves and shows high uncollected rent.
SAN FRANCISCO — The Housing Authority of the City and County of San Francisco told commissioners on July 31 that an adverse HUD assessment tied to fiscal 2022 has been addressed, but outside consultants urged continued operational fixes at several properties.
At the meeting, CEO Tanya Lettishu said HUD’s May 17 letter showed a FAS (public housing assessment system) score of 55 for FY2022 but that the score’s cause “was not as severe nor as endemic” as the agency’s troubled designation in 2019 and that SFHA’s core operations and leasing plans were not materially impaired. “We will continue with our leasing plan of issuing over a thousand housing choice vouchers and issuing over 700 project based vouchers,” Lettishu said.
Consultants from First Pick — Milan Ostenik and David Vargas, both former HUD officials — told the board their on-site review concluded the FY2022 score stemmed largely from late fiscal reporting that produced a “late presumptive failure,” which Vargas said has been cured by timely submission of FY2023 statements. “That problem has been cured,” Vargas said, adding that HUD expects SFHA to be a standard performer for the 2023 FAS score.
But the consultants flagged operational risks at individual properties, particularly Plaza East. Vargas said Plaza East’s REAC inspection score improved from 42 in 2022 to 59 in 2023 but remains below a passing score of 60. He said the property has “no reserves” and “a substantial write off of uncollected rent,” and cited plumbing and design shortcomings that boost maintenance costs. “What’s happening is your revenue’s going down, your expenses are going up — those reserves just disappear,” Vargas said.
The consultants recommended strengthened lease-enforcement practices, increased oversight of contract partners and quality-control checks on vendor files so rent calculations, inspections and reporting meet program rules. Milan Ostenik emphasized the national context for large-scale conversions from public housing to project-based Section 8 and urged that the housing authority remain central in partnerships with developers and the city.
Board members pressed for clarity on causes of Plaza East’s reserve depletion and on how SFHA and city partners will coordinate to finish transformation work. Lettishu said SFHA has been working with HUD technical assistance staff and will bring additional information — including a presentation from the Mayor’s Office of Housing and Community Development — to a future meeting.
The board took no further formal action on the consultants’ recommendations at the July 31 meeting; First Pick will continue work with SFHA to build contract-monitoring capacity and to refine turnaround plans.
Next steps: SFHA said it will invite MOHCD to present on Faircloth-to-RAD planning at an upcoming meeting and will continue partnership work to stabilize properties such as Plaza East and North Beach.
