13 Investigates: GLO to control Harvey recovery after Houston 'hindered' aid

HOUSTON, Texas (KTRK) -- The Texas General Land Office plans to strip the City of Houston from having control of $1.2 billion in federal Hurricane Harvey housing aid, saying the city "hindered" recovery for thousands of 2017 flood victims still waiting for relief years after the storm.

GLO Commissioner George P. Bush sent a letter to Mayor Sylvester Turner on Wednesday issuing a "notice of intent to eliminate funding" and end city oversight of Harvey recovery aid.

Turner blames the decision to end city oversight of the program on "politics," saying after an audit and review, the GLO sent Turner a letter on Friday saying it was satisfied with the city's actions in spending the funds.

"Five days later and directly contradicting his own team, Commissioner Bush now says that slow spending requires him to terminate our contract with the GLO. There's only one answer why Commissioner Bush would draw a different conclusion than the one carefully reached by the GLO's Monitoring and Quality Assurance team - politics," Turner said in a statement.

For past natural disasters, the GLO led recovery efforts, but following Harvey in August 2017, the City of Houston and Harris County were granted the ability to control their own programs, including application intake and the flow of funds aimed at helping homeowners impacted by the hurricane.

RELATED: Slow pace costs Houston, Harris County control of flood money

Two years and eight months after the storm, Houston said 16,291 homeowners expressed interest in the city's Homeowner Assistance Program. Nearly 6,600 were invited to complete an application, but Houston has only awarded 44 reimbursement checks, completed 17 home reconstructions and completed 19 home rehabilitations, according to Houston's Harvey Recovery Situation and Pipeline released March 31.

Still Turner said Wednesday that the city has fully reviewed more than 1,700 files, and is collecting final documents for 975 of them. Additionally 725 homes have been in the inspection, environmental and construction process. A total of 195 homes have been approved.

The GLO is operating its own Harvey recoveryaid program across the state and has completed construction on 1,039 homes as of April 17, as part of its Housing Assistance Program.

"While we assumed we would fulfill this responsibility with the cooperation and assistance of the City, all attempts by GLO to assist the City in meeting its performance goals and, more recently, to renegotiate the Contract to allow for a more timely disbursement of allocated funding have been met with consistent opposition by the City," Commissioner Bush said in his letter to Mayor Turner. "Given that only four years remain in the six-year period during which the (Community Development Block Grant - Disaster Recovery) grant must be expended, the GLO can no longer allow the City to hinder the progress of recovery efforts for Houston residents."

As Houstonians join the rest of the state and country in addressing COVID-19, Turner said the GLO is "attempting to take over the program for reasons not prescribed in the contractual agreements between the parties."

"The City will, therefore, take all necessary legal steps to protect the interest of the people impacted by Harvey and preserve its authority to administer the program," Turner said in a statement.

Turner said the city was faced with its own roadblocks, including the GLO failing to provide "written guidance for what they need to approve homes for repair" and changing the process midstream and often, as recently as April 6, "requiring the reworking of hundreds of already processed homeowner files."

Turner said throughout it all, the city was a good partner with the GLO.

"We were a good partner when the GLO required documentation that went far beyond HUD's requirements. We were a good partner when the GLO refused to allow Houstonians to recover to at least a 3-bedroom home, and we used City funds to pay for the third bedroom the GLO refused to allow," Turner said in a statement. "And we remained a good partner even when in January the GLO suddenly shifted from approving more than 75 percent of our home repair files to rejecting more than 75 percent of our home repair files."

Bush's letter said the city will officially be stripped of its responsibilities pending approval from the U.S. Department of Housing and Urban Development, which originally allocated the relief aid to the State of Texas and GLO.

Houston can still appeal to HUD and the courts to retain control of the program, but doing so could slow down the program as Houston and the state debate who is in charge.

According to Bush's letter, any funds currently allocated to Houston's recovery program will remain within the city and will continue to be used to benefit residents. Still, the GLO has begun implementation of housing efforts in Houston that will run alongside the city's program, "particularly related to rehabilitation and reconstruction of single family owner occupied housing units."

The funding will continue going toward helping Houstonians and the GLO said cooperation with the city is vital for the program's future success. Within the next week, the city has the option to "mutually terminate the Contract in full and negotiate the possible retention" of its Multifamily Rental Program, Homebuyer Assistance Program as well as public services and planning activities under a new agreement.

The GLO said the City was notified of this proposed arrangement on March 5. The city asked the GLO to delay the official notification 30 days, during which time the GLO said it hoped the two agencies would come to an agreement.

On March 18, the GLO began contacting residents who completed surveys but didn't submit full applications. The GLO will continue assisting those homeowners, but if an applicant was contacted by Houston regarding its application, those residents will continue working with the city.

"It is our hope that you and City staff will support the GLO in implementing the housing programs in the City to expedite benefits to the applicants who have been waiting almost three years for assistance," Bush said in his letter to Turner.

Harris County, which was operating its own Harvey recovery program, already agreed to a similar arrangement to make sure county residents receive resources quickly, a GLO spokesperson said Wednesday.

The GLO sent Harris County Judge Lina Hidalgo an outline on April 9 for plans on how the funds could be redistributed. Under the plan, Harris County will maintain control of more than $896 million to support Harvey homeowner recovery projects and the GLO would oversee nearly $300 million for a Homeowner Assistance Program and an additional $40.4 million for housing project delivery and admin costs.

13 Investigates first reported on issues with the city's recovery program in late June 2019, when only four people had received aid despite the private company hired to run the program being paid millions for its role in the slow-moving program.

In August, the City of Houston said it ended its contract with APTIM, the private company hired to be the program manager, saying that its contract ran out. At that time, APTIM had already been paid $4.6 million.

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