Problems Facing Financially Distressed Multifamily Housing: A Field Study of the HUD-Insured, Unsubsidized Inventory

摘要

Twelve percent of HUD's insured, unsubsidized, multifamily housing projects are financially distressed -- defaulted, assigned, or acquired -- and this study was undertaken to identify and categorize the problems faced by such unstable projects. The primary data base was created through a structured survey of 228 financially distressed unsubsidzied projects randomly selected from 12 field office jurisdictions. A comprehensive, two - part survey instrument (included) was used to obtain information from HUD field officer personnel on the physical, administrative, financial, tenant, neighborhood, and problem characteristics of the sampled projects. Additionally, information was obtained through site inspections of 59 of the projects and interviews with their owners and managers, HUD field staff and their supervisors, and 75 private sector housing professionals, including mortgage bankers, attorneys, developers, and property managers. The major finding was that three general problem types, often acting in combination, have detrimental effects on the viability of these projects: (1) adverse program and market factors, including a weak investment structure and a lack of project marketability; (2) inadequate development and management by developers, owners, and managers, throughout the projects' lives, including the failure to arrange for adequate financing, poor supervision of construction, and inadequate maintenance practices; and (3) inadequate HUD development and management practices for unsubsidized projects, resulting from insufficient management resources and an inefficient and unprofessional management environment. Not all financially distressed projects were found to be equally troubled; in fact, a small, but significant number were relatively ''healthy'' and had few severe problems. The major implications of these findings for policy development are that (1) many of the problems facing financially distressed projects could, and should, have been avoided, and (2) most of the problems now facing the projects are potentially manageable. Tabular data are provided.