Papen to carry governor’s housing authority bill

Sen. Mary Kay Papen, D-Las Cruces, will introduce a bill today that would give oversight of the scandal-plagued regional housing authority system to the New Mexico Mortgage Finance Authority.

Papen will be pushing Gov. Bill Richardson’s proposal to deal with the problems that toppled the state housing authority system last year. She’ll announce the legislation today at a joint news conference with Lt. Gov. Diane Denish and MFA Director Jay Czar.

The news conference is at 10 a.m. in the Governor’s Cabinet Room at the Roundhouse in Santa Fe.

“The purpose of this bill is to provide accountability and oversight when it comes to housing,” Denish said in a news release.

Noting that two of the seven regional housing authorities are still functioning well and were not touched by the scandal, Denish said the bill “will allow the functioning entities to restructure and enable them to expand service under the guidance of the Mortgage Finance Authority.”

Independent reviews of the housing authority system last year by the governor’s office and the State Investment Council recommended additional oversight by a state agency, saying better state checks could have prevented the gross mismanagement both reviews discovered.

The system fell apart last year when the Region III Housing Authority in Albuquerque defaulted on $5 million in bonds it owed the state. The reviews found widespread misuse of the bond money and have sparked an investigation by the attorney general’s office. Sources tell me a resolution will soon be introduced in the state Legislature calling on the U.S. attorney’s office to investigate.

Update, 3:20 p.m.

Papen’s bill would immediately:

• Give bonding authority for the regional housing authorities to the MFA.

• Require audits of all state regional housing authorities.

• Allow the authorities that are still functioning to restructure as non-profits or local providers.

After July 1:

• The authorities would cease to exist. Those deemed “well-performing” would be replaced by the new non-profits or local providers. Their coverage areas would be expanded to help serve the state.

• Those areas not served because poor-performing housing authorities shut down would then be served by agencies selected by the MFA through an RFP process.

• Oversight and accountability for assets would be taken over by the MFA.

• MFA will aim to expand service in underserved regions.

Papen said the proposal will help the state better provide affordable housing under a system that is accountable to taxpayers.

“It really is about accountability and oversight, so the affordable housing is going to the people it needs to be going to,” she said.