The Miami-area’s largest housing developer is under federal scrutiny for potential abuses of federal tax credits and other public funds used in developing affordable housing, according to reports.
Related Group has been named as one firm being investigated by the U.S. Attorney’s Office, which is looking into abuses in Miami-area affordable housing developments, according to the Miami Herald. The other developers targeted in the inquiry have not been named, according to the paper.
At least a dozen publicly subsidized housing developments have come under scrutiny, including a number of ones spearheaded by Related Group. Specifically, federal investigators are looking into whether Related pocketed money by misrepresenting construction costs on a senior housing project in Miami.
The Herald reports:
Still in the early stages, the federal investigation focuses on whether Related misrepresented construction costs through a wholly owned contractor and its subcontractors, and reaped profits that should have been returned to the county to spend on other affordable housing projects, according to sources familiar with the investigation. Prosecutors have empaneled a federal grand jury to gather records by subpoena, including one that was issued to the county this week seeking documents on Related’s project and others built by different developers, which the Herald has not been able to identify.
Related Group is known as a luxury developer with buildings in virtually every glitzy area in Miami. It’s affordable unit, Related Urban, is also a major player in subsidized developments. Related Group founder and Chairman Jorge Perez said his company is not the focus of the government’s investigation and that he welcomes federal oversight on the affordable housing industry.
“Given recent events involving other companies in our industry, we understand that the U.S. Attorney’s office is taking a close look at the entire affordable housing sector. This is the right thing to do, and we have been working cooperatively with it,” Perez said in an op-ed in the Miami Herald. “I consider our work in the affordable housing sector to be an obligation to the communities we serve. We have a long history of delivering quality projects, on time and on budget. For anyone to suggest otherwise is simply wrong.”
This isn’t the first time Miami’s affordable housing developments have come under scrutiny. In 2015, a number of executive were convicted of inflating costs on 14 subsidized projects.
Affordable housing is needed all throughout the country but especially in Miami. It’s one of the least affordable cities for housing, especially for middle-income earners like teachers.