Officials at the Atlantic City Housing Authority in New Jersey are holding a public meeting Tuesday to update residents after federal officials announced they would take over the agency.
The housing authority has been "a troubled performer" since 2022, and it is now in "substantial default," according to a letter the agency received July 21 from the U.S. Department of Housing and Urban Development. The letter notes that the Housing Authority scored 60 out of 100 in its 2022 evaluation, followed by a 45 in 2023. Because of those scores, and other reasons, HUD said it will take possession of the housing authority, "including, but not limited to its programs, projects, and assets at a reasonable time of HUD's choosing."
In the letter, HUD officials said they would give Atlantic City's housing authority 10 days to dispute claims of mismanagement before the takeover is finalized.
Thomas Sahlin, the authority's executive director, said in a statement Friday that his staff is working on a detailed response to the HUD letter.
"We fear that the proposed takeover would not be in the best interest of our residents, considering the tremendous amount of work that has been put in over the past one and a half years to address a multitude of issues," Sahlin's statement read.
HUD Secretary Scott Turner announced the department takeover on social media Thursday.
"At HUD, we are called to be good stewards of two things: taxpayer dollars and the people we serve," he said on X. "The Atlantic City Housing Authority has neglected that mission. We are taking action to stop negligence and deliver a safe environment for tenants."
In many locales, the housing authority handles tenant placement and the physical upkeep of public housing — mostly rental units in multifamily buildings. Atlantic City has rental units as the majority of its portfolio, but the housing authority also sells single-family homes to residents. The authority also offers its Section 23 Home Ownership Plan from which New Jersey residents can purchase a property from the agency — sometimes at 50% of the appraised value.
Atlantic City failed to fulfill performance plan, HUD says
To be clear, it's not uncommon for HUD to take over local housing authorities. The department seized Chicago and New Orleans' operations in the 1990s and the authority of Sarasota, Florida, in 2005. HUD almost took over New York City's housing authority in 2019, but officials from both sides agreed on a compromise.
Scoring a 60 and a 45 pushed the Atlantic City Housing Authority into default status, the HUD letter states. HUD placed the housing authority on a performance recovery plan — a plan federal officials allege has not been fulfilled. Some of the items on the recovery plan include submitting audited financial statements from 2022 and 2023 and hiring an outside vendor to evaluate the renovation needs of housing units in poor physical condition.
Congressman Jefferson Van Drew, a Republican whose district covers Atlantic City, said the HUD takeover comes after years of subquality living conditions for residents.
"Families were freezing in their homes, living with mold, no heat, no hot water, and no help," Van Drew said in a statement last week. "It was unacceptable. For years, I have been fighting tooth and nail to get HUD to take over the ACHA, and now that day has finally come."