Marcia Lewis was brought in at the start of this year as the interim executive director to keep the Indianapolis Housing Agency afloat while a financial and operational reckoning took place to determine the future of the entity that oversees affordable housing for 24,000 low-income Marion County residents.
Lewis told Fox 59 News that a year from now, IHA will likely be out of the landlord and property management business.
“This is going to be a transition that probably will end maybe at some point about this time next year.”
IHA is in such a fiscal and operational mess that Lewis said selling off its properties and financial interests is the only way the agency can make its payroll, fill empty jobs, pay back the federal government and confirm that residents will continue to receive affordable housing assistance even if its administered by private property investors and management companies.
“We’re not losing affordable housing and I want to make sure that people understand that,” she said. “We’re not selling our affordable housing, displacing people, nobody gets displaced, no rent gets changed, they are where they are and hopefully what it will bring is better services and be improvements.”
This week Lewis issued the May update to her “Moving Forward Plan” which accelerates IHA’s departure from the property owner and landlord business while narrowing its priorities to reorganizing the agency.
“We have to change property management services because we didn’t do what we should do and we’re being required by the investors because they want to see improvements made,” said Lewis, referring to private market investors who qualify for tax credits as part of their commitment to maintaining affordable housing. “We’re focusing on financial stability and without that we can’t do any of the rest. You can’t hire people if you can’t pay the people you already have, you can’t do repairs if you don’t obtain the funds to make those repairs.”
Those promised repairs can’t come soon enough for the residents of the Martindale, a townhouse development on the eastside, where IHA spent approximately ten million dollars to reopen the rehabilitated community just a couple years ago where now neighbors report sewer problems traced to construction debris in the pipes and the area has been overrun with rodents this spring.
“The rats was like this size,” said John Webb as he held his hands at least eight inches apart, “and my sister has mice. It’s like they play every night and in the morning just running around.”
Webb said the Martindale hasn’t had a fulltime manager or maintenance man for at least two months.
“Ever since the main rent lady been gone, everything’s just been going down and the trash is out here,” he said. “That garbage can over there, it was just piled up and I think that’s what caused the rats and mice.”
Amber Phelps, who showed us an unusable downstairs toilet that is not bolted to the floor of her bathroom, said she can’t get a maintenance response from IHA’s executive office.
“We call numerous times to complain about the rats and mice, they’ve pretty much taken over the complex and its getting out of hand, and they’re not helping us,” she said.
Lewis has seen management and maintenance staff leave the agency in droves and currently needs to fill her chief financial officer and chief operating officer positions as well as begin interviews for her own permanent successor to begin work at the start of 2023 and hire other support employees.
“We’re struggling with staffing,” she said. “We’re struggling with the ability to keep up with long overdue repairs and items that need to be taken care of in our properties and communities.”
Lewis has estimated IHA needs ten million dollars immediately to balance its books, pay overdue bills, close out expensive construction loans and make reimburse the federal government for past cash infusions.
Lewis said a review of the books indicates IHA did not apply for federal assistance it was due beginning in 2018 and she also expects audits by the Department of Housing and Urban Development will confirm potential financial mismanagement at IHA dating back more than a decade which could potentially unravel the tangled operations that left the agency on life support.
“There’s gonna be some additional findings on top of what we’re already held accountable to,” Lewis said. “I have seen HUD take action against past officials when they could directly show where their actions and their work has cost some federal loss of service or did not use the federal funds the way they were supposed to.”
The jewel of IHA’s portfolio could be the Millikan Two development on Massachusetts Avenue which Lewis hopes could bring a sale price of $13 million.
“It’s on Mass Avenue, it’s in a great location, its got commercial property underneath and it’s got market rate, some luxury housing up above and we think it will be a very marketable very attractive offering for someone who is in the business of being able to handle it,” she said. “We’re not.”
Lewis said other IHA owned properties or agency financial interests in communities will also be up for sale.
“We’re probably talking about a thousand a unit and we’re probably talking about 1600 units roughly, so, you’re talking about, and this is just for general interest, you’re talking anywhere up to $15 million, $16 million and the market is very very good right now,” she said. “I see prospects and opportunities in the city for affordable housing.”
Lewis imagines an agency that will administer Section 8 vouchers connecting low-income residents with private landlords, which could include former IHA properties.
“We need to focus and rebuild the Section 8 side of the house,” she said. “We have almost nine thousand vouchers and our program is being run like we have three thousand. We need to build up staffing. We need to change the salary structure and pay people. We need to put together a compliance piece. We need to put together a service team.”
For the time being, Amber Phelps needs help getting the mice out of her unit since she said maintenance crews or pest control contractors haven’t visited the Martindale in months.
“They haven’t checked these rat baits in about five months around the property so its impossible for them to check every unit and see how bad the infestation has gotten,” said Phelps.
Lewis told Fox 59 News she may have a solution for the Martindale’s rodent problem.
“I have a pest control issue,” Lewis admitted. “I’m even talking to the City about having an opportunity to meet with Animal Control to see about a working cat program to deal with pest control in one of my communities.”
When asked for comment on IHA’s current crisis, Mayor Joe Hogsett’s office issued the following statement:
The City agrees it is prudent for IHA to explore ways to generate revenue to make up for the federal funds left untapped over recent years. Selling a downtown, market-rate development could generate a premium sale price given its age and location. Additionally, contracting with third-party property managers for former public housing sites will enhance building maintenance and improve quality of life for residents.
In the meantime, the City continues to discuss with IHA ways that it might help in both the short-term and long-term. At the same time, we support the operational improvements Marcia is making to ensure IHA maximizes the federal financial resources the agency receives on a go-forward basis.