Under Federal Order, City Housing Authority Hires Florida Company

Houses on the 2900 block of S. 11th St. Photo by Jeramey Jannene.

Milwaukee is paying the price for systems and staffing failures with the Housing Authority of the City of Milwaukee (HACM).

As required by a federal corrective action plan, the HACM board approved outsourcing management of a program that provides housing for almost 8,000 households.

“It’s not the position we want to be in,” said acting board chair Brooke VandeBerg during a special board meeting Oct. 30.

But an audit by the U.S. Department of Housing and Urban Development found that HACM’s internal practices related to Section 8 vouchers were “at risk for serious fraud, waste and abuse.” The federal assistance program provides cash payments (vouchers) to private landlords to provide housing for qualifying low-income households.

The board, which is set to be overhauled in December, unanimously approved negotiating a final agreement with Florida-based CVR Associates.

In 2023, according to a January request for proposals (RFP), HACM was responsible for administering $42 million in vouchers and expected to receive $5 million in administrative fees. The vouchers cover approximately 7,800 housing units, of which 1,700 are HACM-owned. The majority of the vouchers go to private-sector housing used by lower-income residents.

CVR was the highest scoring of six bidders. Milwaukee County’s Department of Health & Human Services Housing Services Division was the lone public entity to bid. The only other Wisconsin-based bid came from Pivotal Property Management, a Milwaukee-based property management firm.

HACM has previously contracted with CVR to improve its voucher program. Now, it will turn over the keys.

“The main work that is going to be done is going to be local,” said HACM chief operating officer Ken Barbeau. The work would be performed at HACM’s office at 5003 W. Lisbon Ave. “They will hire local people from Milwaukee to work on this.”

That could include HACM’s current voucher program employees, who will otherwise be out of a job.

The RFP issued by HACM requires the winning bidder to “seriously interview” HACM’s existing staff for new roles. “They have stated that is their intent,” said Barbeau. “They would bring in their own salary and benefit package.”

Barbeau said the authority had not decided whether to offer a severance package to any individuals because it is not sure how many people would not be hired by CVR. “If we are dealing with one person, five people or ten people, it could be different,” said Barbeau.

“We would like to hear more about this when that time comes,” said VandeBerg. HACM Executive Director Willie Hines, Jr. confirmed that no money has been set aside for any severance packages.

The board unanimously approved advancing negotiations with CVR.

The proposed contract is for five years with an option for a three-year extension. CVR, according to the resolution, would be paid an average of 80% of the $5 million administrative fee over the life of the deal.

HACM would also pay CVR up to $990,000 to conduct a “100% participant file review to ensure all documentation and calculations are correct with all participant files.” The review was required as part of HUD’s corrective action plan. Much of that work, according to Barbeau, could be performed by out-of-state subcontractors.

CVR contracts with many housing authorities, and its highest-ranking executives, including CEO Fradrique A. Rocha, all worked at housing authorities or HUD before joining the consulting firm.

Reading a letter from then-board-member-in-waiting Karen Gotzler, Vandeberg said the new board member endorsed the process to select the vendor and said she would participate in a final negotiation over the agreement. She said a “shortest necessary time” contract could allow HACM to resume control over the program within a couple of years. Gotzler was confirmed by the Common Council on Nov. 6. Three more appointments are pending a Nov. 26 confirmation, which would also result in VandeBerg ending her time on the board. She has served with an expired term since 2023.

Common Ground Southeastern Wisconsin, the coalition that has led public pushback against the agency, has opposed the outsourcing agreement and favored hiring Milwaukee County.

“Mayor [Cavalier Johnson] and Hines are privatizing Milwaukee’s largest housing safety net for at least a half decade, all because they failed to manage it properly in the first place,” said the organization in an Oct. 30 statement. “Shame on Mayor Johnson and Willie Hines. They know what they are doing, which is why the process stinks as bad as the proposed outcome. Milwaukee would have benefited much more from keeping Section 8 local, not-for-profit, and publicly accountable.” Common Ground, which has supported the slate of new board members, said the proposal should have waited until the new members were added, instead of “sneaking trying to ram through” a deal in an Oct. 30 special meeting.

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