The Senate voted today to scrap the troubled regional housing authority system and replace it with a new method for providing affordable housing.
On a vote of 36-1, with only Sen. Rod Adair, R-Roswell, dissenting, the Senate approved Senate Bill 519, sponsored by Sen. Mary Kay Papen, D-Las Cruces. A companion bill hasn’t yet begun moving through the House.
The bill has the endorsement of the governor.
The proposal would, over a period of several months, shut down the state’s scandal-plagued regional housing authorities and replace them with a system overseen by the New Mexico Mortgage Finance Authority.
The bill would also provide for audits of each of the seven housing authority regions to determine the extent of the mismanagement first revealed last year when Frances Williams, a member of the Las Cruces-based Region VII board, complained about problems. Several weeks after she went public, the Region III authority, based in
As was the case in committees, several senators asked questions today about the employees of the two regional housing authorities that are operating well. The bill was amended in the Finance Committee to require that the MFA give preference, when selecting contractors to provide affordable housing under the new system, to non-profits or local governmental agencies that employ those currently employed by the two high-performing housing authorities.
The intent is that the two high-performing regional authorities reshape themselves under city or county government or as non-profits.
Papen said the bill will provide “more flexible oversight and accountability,” and said it would not work to break up the system and leave some housing authorities in place but move others under the MFA. The amendment was her attempt to allay concerns about the employees.
‘This can’t go on’
Sen. Mark Boitano, R-Albuquerque, spoke in support of the bill.
“I’m satisfied that the way this bill is written, it will reward those who have been doing a good job,” he said.
He asked about the $5 million in bonds and what would happen to the debt owed to the state. Papen pointed out that the bill funds audits of all housing authorities to help determine where the money has gone.
“It is somewhat of a tangled web,” Papen said.
Sen. John Arthur Smith, D-Deming, said he is hopeful that the money to repay the bonds can be found from among the assets of the housing authorities.
“If it can’t, it’s ultimately going to have to come from the taxpayers,” he said.
He also spoke in support of the bill, saying the amendment would help protect employees of the high-performing authorities but also provide accountability under a new system.
“This can’t go on,” Smith said.
Adair voted against the bill because he wasn’t satisfied with Papen’s attempt to protect the employees of high-performing housing authorities.
“Are we kind of punishing all of the competent housing authorities for the incompetence of two or three?” Adair asked. “… To have them placed under this particular act does in fact seem to be kind of throwing the good in with the bad.”
‘We haven’t uncovered everything’
The housing authority scandal is a hot potato in the Legislature because of the relationship between Speaker of the House Ben Lujan and former Region III Housing Authority Director Vincent “Smiley” Gallegos. Gallegos is a former legislator and current lobbyist who, in past sessions, has spent a lot of time in the speaker’s office.
Among the scandals that have plagued the housing authority was the disclosure late last year that a top aide to Lujan, who may not qualify for low-income housing, had been living rent-free in a home owned by the Region III authority. After the situation was revealed by the Albuquerque Journal, the aide paid back rent. She continues to live in the home.
Lujan has repeatedly said he didn’t know about the situation until a reporter told him about it, but concerns about his relationship with Gallegos were among the reasons some House Democrats supported Majority Leader Ken Martinez of Grants in December in his failed bid to become speaker.
Lujan has signed on to the House version of the bill, House Bill 997, sponsored by Rep. Janice Arnold-Jones, R-Albuquerque, but also assigned it to three committees, which lawmakers generally consider an attempt to slow or kill a bill.
The bill has not yet been scheduled for a hearing.
The only hint at the political nature of Papen’s proposal was made by Sen. Diane Snyder, R-Albuquerque, who praised Papen for “how well she has negotiated these waters” of a politically sensitive issue. She said the state needs more legislators like Papen.
In addition to the audits that would be funded by the bill, the attorney general is conducting a widespread investigation, and a group of lawmakers have also asked the
Papen referred to additional revelations to come in the scandal.
“We haven’t uncovered everything, we don’t believe,” Papen said.