A family of four in New York City makes $497,911 a year but pays $1,574 a month to live in public housing in a three-bedroom apartment subsidized by taxpayers.

In Los Angeles, a family of five that’s lived in public housing since 1974 made $204,784 last year but paid $1,091 for a four-bedroom apartment. And a tenant with assets worth $1.6 million – including stocks, real estate and retirement accounts – last year paid $300 for a one-bedroom apartment in public housing in Oxford, Neb.

In a new report, the watchdog for the Department of Housing and Urban Development describes these and more than 25,000 other “over-income” families earning more than the maximum income for government-subsidized housing as an “egregious” abuse of the system. While the family in New York with an annual income of almost $500,000 raked in $790,500 in rental income on its real estate holdings in recent years, more than 300,000 families that really qualify for public housing lingered on waiting lists, auditors found.

But HUD has no plans to kick these families out, because its policy doesn’t require over-income tenants to leave, the agency’s inspector general found. In fact, it encourages them to stay in public housing. “Since regulations and policies did not require housing authorities to evict over-income families or require them to find housing in the unassisted market, they continued to reside in public housing units,” investigators for Inspector General David Montoya wrote.

The review, conducted in 2014 and 2015 at the request of Rep. Phil Roe, R-Tenn., found that 45 percent of the 25,226 public housing tenants with incomes higher than the threshold to get into the system were making $10,000 to $70,000 a year more. About 1,200 of them had exceeded the income limits for nine years or more, and almost 18,000 for more than a year.

HUD sets the low-income limits at 80 percent and very low-income limits at 50 percent of the median income for the local area. The agency sets “fair market rents” every year based on incomes, housing demand and supply. In Los Angeles, for example, the threshold was $70,450 for a family of five. In Oxford, Neb., it was $33,500 for an individual.

About 1.1 million families in the country live in public housing. The over-income tenants represent 2.6 percent of the system.

The watchdog estimated that taxpayers will pay more than $104 million over the next year to keep these families in public housing.


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.