City officials confirmed this week that the Health, Housing & Homelessness Department (HHH) has ended its contracts with the Supportive Housing Coalition of New Mexico (SHCNM) — a longtime housing voucher service provider assisting those who otherwise might be unhoused or precariously housed. Officials said SHCNM misused $234,000 in funds for administrative and operational costs instead of making voucher payments to landlords.
SHCNM leadership said the nonprofit’s financial issues began after millions in housing voucher funds was cut from the last city budget, which was finalized in the summer.
Housing vouchers are considered an essential step toward more stable options for those who qualify. The city enters into contracts with nonprofit providers to administer the vouchers on behalf of clients who use it to cover up to 70% of their monthly rent.
The city said it has begun a “corrective action plan” to recoup the backpayments that were owed to landlords and ultimately paid by the city to avoid tenant evictions. The required backpayment amount, said HHH spokesperson Connor Woods, was determined through SHCNM reporting and verified by landlords.
Woods said the city has also notified the New Mexico Office of the State Auditor and the city’s Office of Inspector General about the issue.
At Monday’s City Council meeting, Councilor Reneé Grout asked city Chief Administrative Officer Samantha Sengel if officials were authorized to make direct payments to landlords instead of through service providers.
“We made a decision to ensure that we did not allow any [rental payment] lapse and ensure that no one would be unhoused,” Sengel replied. “So it was essentially an emergency decision.”
Woods said no evictions took place due to the city’s payments.
Grout told Sengel she was concerned that almost $250,000 funneled through SHCNM was unaccounted for.
“We don’t know where it is,” she said. “How many people could this be housing right now if this money hadn’t been spent improperly? It bothers me greatly; I know it bothers you, too.”
Repayment, client transfer
Meanwhile, SHCNM interim director Debbie Davis told City Desk ABQ on Monday that the nonprofit was recently notified that the city had decided not to renew almost $2 million in permanent supportive housing voucher contracts, which it has administered for several years.
“They paid all the backpayments and now we have to enter into a payment agreement with them,” she said.
Davis said officials told her the nonprofit has 15 days to make repayment, but that a meeting was scheduled Tuesday to discuss the details. She’s been the interim executive director since Nov. 15 and was previously the chief operating officer for three and a half years.
“We used [voucher funds] to pay expenses for the company and rent — just not all the rent,” she said. “There wasn’t anything we could do but admit to [the city] that it was going on.”
Woods said the city first discovered there was an issue with SHCNM payments in July, and that direct payments to landlords began Nov. 1.
“Keeping people housed is the No. 1 priority,” Davis said. “We’re transferring the [client] files and doing everything we need to do. We still have community housing staff who will work diligently to get it done.”
SHCNM owns and/or manages three affordable housing properties in Albuquerque, and one each in Las Vegas and Gallup.
About 120 SHCNM voucher clients — representing families and individuals — are expected to be transitioned to other providers “in months if not weeks,” according to Sengel.
When asked which providers would absorb the voucher clients, Woods said the city was negotiating agreements.
“Once those contracts have been finalized, we will be able to share this information,” he said.
At the City Council meeting, Councilor Brook Bassan asked Sengel how the city knows that all the compromised tenants have been made aware of the situation and that their rent payments have been made.
“I ask because I had heard of an individual just this last weekend who found out about this — what I’m going to call a debacle — and they claimed that they were $4,000 in arrears and were in tears and not sure what’s going to happen next,” Bassan said. “So how do we make sure … that we’re helping those people that might not have even heard that the city might be helping them?”
Senegal said the city’s voucher tracking process ensured that landlords were being paid and that clients weren’t falling through the cracks.
In the meantime, the city has also set up a web page for housing voucher clients wishing to report issues with SHCNM.
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