BILL SZYMCAK is one of the top officials in Detroit's HUD office. To get some idea of where HUD's taxpayer money is going, we went with him to northwest Detroit. Here's one of your houses: "For Sale." What'll you sell it to me for?
SZYMCAK: Well, a dollar today, Mike. Actually, we've had it on the market three different times already, and haven't gotten an offer for it: once for $3,500; once for $1,500; and finally we said we'd take any offer, and we didn't get one.
WALLACE: This belongs to you?
WALLACE: You're going to tear it down?
SZYMCAK: We have no choice now.
WALLACE: And you will lose-- we will lose how much?
SZYMCAK: Twelve to fourteen thousand dollars.
WALLACE: That totals $90 million a year in Detroit alone. A staggering half-a-billion dollars nationwide. Some of these hulks have been waiting more than a year. Demolition contractors have their own tales of HUD mismanagement to tell.
MAN: Two weeks ago I saw three men on the roof of a building that was scheduled for demolition putting new shingles on it. We have seen them paint buildings that have no windows in them that are scheduled for demolition. Just happens to be mismanagement.
WALLACE: Let's take a look at the one down at the corner. The abandoned house on the corner was not yet actually a HUD property, but since it was FHA insured, it soon would be. The mortgage company had foreclosed, and in a few more months it would be able to hand the home over to HUD and get its money out. Until then, the company was supposed to be protecting the property by boarding it up. Let's go inside.
WALLACE: This is supposed to be locked up.
SZYMCAK: Yes, it is.
WALLACE: Let's see. [Opens door] No.
SZYMCAK: Wide open.
SZYMCAK: Well, it's a mess. You can see the heaters have been pried out. It looks as if the copper pipe in the house has been snipped out, and all the plumbing fixtures have been stolen.
WALLACE: Just to maintain the properties --to pay the taxes, keep them free of debris and boarded up-- costs HUD nationwide about a half a million dollars a day. HUD also used to pay out millions of dollars to repair homes for resale, but it was a hopeless task. Ninety percent of those homes were vandalized, either during or after repair. Some homes were actually repaired three or four times over. New fixtures installed one day, ripped out the next. HUD pays management firms to keep an eye on its properties, to keep them clear of debris, to bring in contractors to board them up. In the Jefferson-Chalmers area of Detroit, HUD pays a local citizens group to do the work, the theory being the group will do a good job because it's from the community. Yet, when we made a spot check, we found this HUD house wide open in back. Nearby, several other HUD properties also not boarded up, or strewn with debris. Next day, we returned to that area with Ray Rickman, an outspoken HUD critic who runs that community citizens group.
WALLACE: HUD pays you, Jefferson-Chalmers District Council, to board up these houses and to make sure that vandals don't get in and so forth. Right?
RAY RICKMAN: Yes, yes.
WALLACE: You're doing a good job?
RICKMAN: Yes, we are.
WALLACE: You are?
RICKMAN: Currently, yes.
WALLACE: Come on back with me. We were here yesterday. Now, you people get paid $35,000--
RICKMAN: That's right.