The Navajo Housing Authority received a draft report dated September 5 from the Northern Plains Office of the U.S. Housing & Urban Development Department that asks for repayment of $11 million for a failed 91-unit housing development project that was funded by the Authority in FY 2003 and FY 2004 NAHASDA funding, during Chester Carl’s term as Chief Executive Officer of the Navajo Housing Authority.
The South Shiprock housing project was stopped in April 2005 after the contractor become embroiled in bankruptcy proceedings while also performing work for the former Fort Defiance Housing Corporation, also a sub-recipient of the Navajo Housing Authority at the time.
“Approximately $11,751,274 in IHBG funds were expended on the construction of 91 single family homes that have never been inhabited and therefore, never used for affordable housing activities,” reads the Sept. 5 letter. And to correct the action, HUD wrote, the NHA must “Repay with non-HUD resources' the IHBG funds spent by check or wire transfer.”
The South Shiprock housing development project started in 2003 after Chester Carl and the Navajo Housing Authority awarded the South Shiprock Housing, Inc. FY 2003 NAHASDA funds in the amount of $9 million to construct 53 houses. The project was then awarded additional funding under FY 2004 NAHASDA funds in the amount of $5,523,808 to construct an additional 38 houses. The chronology of events are detailed in a Navajo Housing Authority letter dated May 22 to HUD after HUD requested clarification nearly 10 years after construction started. HUD then acknowledged our response in their September 5 letter to the Authoirty and in the same letter informed us that we must repay $11 million because homes were never actually lived in.
“This is exactly what we have been saying all along,” said Aneva Yazzie, who took over as CEO of the Navajo Housing Authority in February 2007. “There were a lot of things that happened prior to my coming on board that we had to clean up. This is one of them and we are still not done.”
After coming onboard as CEO, Yazzie immediately set out to correct these problems, which in some cases took until 2011 and others still contending with today.
On Tuesday, Bill Aubrey, the contractor for the Shiprock 91-unit housing project was sentenced to 4.2 years in federal prison by a Nevada federal judge. “The public needs to understand that we have had to spend a lot of time cleaning up the mess of others,” Yazzie said. “Because of what Aubrey, Carl, and others did, people still point fingers at the Navajo Housing Authority management today. This has made us look bad in the eyes of the public, when all this happened before I came on board. Their actions deprived many women, children, veterans, and the elderly of affordable and quality homes.”
“Because the project was never finished and litigation went on for years, the homes were never completed by Aubrey who cut corners and costs in building the homes that were partially completed before he was suspended and eventually debarred by HUD,” Yazzie said. “Due to posing as safety hazards in its vacant status, the homes have to be demolished and rebuilt to meet HUD’s decent, safe and sanitary standards. And because the project was stopped mid-way, and bankruptcy proceedings began, many subcontractors and businesses were left out to dry.”
Yazzie added that once the Navajo Housing Authority took over the project and began looking further, they found other problems. “We discovered that portions of the land tracts did not even have proper environmental clearances or properly withdrawn,” said Yazzie.
“Where were all the appropriate oversight and monitoring entities that allowed this project to languish since 2003 before such conditions became an extreme safety hazard?” she asked. “We had difficulty with SSHI management and its Board since 2007 because the Navajo Housing Authority does not own the subdivision nor is responsible for its management to effectuate timely corrective action; yet, HUD holds the Navajo Housing Authority responsible. The Navajo Housing Authority intends to respond to HUD’s draft report within the required timeframe.”