Report To The Utah Legislature - A Performance Audit Of The Division Of Housing And Community Development - 2012 Page 5
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33Digest of
A Performance Audit of the Division of
Housing and Community Development
Some operations of the Division of Housing and Community
Chapter I:
Development (HCD or division), Utah’s focal point for low-income
Introduction
housing development, have raised concerns over the last few years.
Much of the concern arises from the division’s change in its
operational model from that of a direct fund provider to that of a loan
provider taking a greater interest in the way funds are used. Along
with this change is an increase in the division’s involvement in site
development and fund leveraging.
Primary concerns include HCD’s decision to purchase property in
South Salt Lake, its handling of federal Neighborhood Stabilization
Program (NSP) money, and other governance issues. In these
concerns, we found that the division acted appropriately under their
board’s assumption that statute allows direct involvement in land
acquisition. Current statute speaks to how and where funds should be
spent, but is silent on the mechanism for expending the funds. While
the division has been innovative in its interpretation of laws and public
leveraging, its actions have alienated some organizations in the low-
income housing community. We recommend that HCD establish
guidelines to ensure its own actions, not just those of its community
partners, align with the legislative intent of leveraging money.
HCD has detailed guidelines to evaluate low-income housing
Chapter II:
projects proposed by private developers, yet lacks policies to evaluate
Policy for HCD
its own in-house development projects. In 2007, HDC used the
Driven Projects
Olene Walker Housing Loan Fund (OWHLF or fund) to purchase
Needs to be
6.9 acres of land in South Salt Lake with the intent to develop housing
Strengthened
for homeless veterans. We found nothing to indicate that this
purchase was contrary to any laws or the division’s authority.
However, it was a non-traditional approach compared to HCD’s
routine use of private developers that does not appear to have limited
OWHLF’s ability to contribute to other projects. To better align
department practice with legislative intent and avoid unnecessary
costs, HCD should create guidelines for projects where HCD’s
participation goes beyond that of a funding source.
Office of the Utah Legislative Auditor General
i
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