[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
[H.A.S.C. No. 117-6]
PRIVATIZED MILITARY FAMILY HOUSING:
UPDATE ON IMPLEMENTATION OF HOUSING REFORMS
__________
JOINT HEARING
before the
SUBCOMMITTEE ON READINESS
meeting jointly with the
SUBCOMMITTEE ON MILITARY PERSONNEL
of the
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
MARCH 10, 2021
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
_________
U.S. GOVERNMENT PUBLISHING OFFICE
48-570 WASHINGTON : 2023
SUBCOMMITTEE ON READINESS
JOHN GARAMENDI, California, Chairman
JOE COURTNEY, Connecticut DOUG LAMBORN, Colorado
JACKIE SPEIER, California JOE WILSON, South Carolina
JASON CROW, Colorado AUSTIN SCOTT, Georgia
ELISSA SLOTKIN, Michigan, Vice JACK BERGMAN, Michigan
Chair MIKE JOHNSON, Louisiana
JARED F. GOLDEN, Maine MARK E. GREEN, Tennessee
ELAINE G. LURIA, Virginia LISA C. McCLAIN, Michigan
KAIALI'I KAHELE, Hawaii BLAKE D. MOORE, Utah
MARILYN STRICKLAND, Washington
Jeanine Womble, Professional Staff Member
Ian Bennitt, Professional Staff Member
Sean Falvey, Clerk
------
SUBCOMMITTEE ON MILITARY PERSONNEL
JACKIE SPEIER, California, Chairwoman
ANDY KIM, New Jersey JIM BANKS, Indiana
CHRISSY HOULAHAN, Pennsylvania STEPHANIE I. BICE, Oklahoma
VERONICA ESCOBAR, Texas, Vice Chair LISA C. McCLAIN, Michigan
SARA JACOBS, California RONNY JACKSON, Texas
MARILYN STRICKLAND, Washington JERRY L. CARL, Alabama
MARC A. VEASEY, Texas PAT FALLON, Texas
David Giachetti, Professional Staff Member
Glen Diehl, Professional Staff Member
Sidney Faix, Clerk
C O N T E N T S
----------
Page
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Banks, Hon. Jim, a Representative from Indiana, Ranking Member,
Subcommittee on Military Personnel............................. 5
Garamendi, Hon. John, a Representative from California, Chairman,
Subcommittee on Readiness...................................... 1
Lamborn, Hon. Doug, a Representative from Colorado, Ranking
Member, Subcommittee on Readiness.............................. 3
Speier, Hon. Jackie, a Representative from California,
Chairwoman, Subcommittee on Military Personnel................. 4
WITNESSES
Aycock, MG Al USA (Ret.), Military Partnership Executive, Corvias 6
Taylor, Rick, President, Facilities, Operation and Construction,
Balfour Beatty Communities..................................... 9
Tregarthen, Carolyn, Managing Director, Lendlease Americas....... 7
APPENDIX
Prepared Statements:
Aycock, MG Al................................................ 39
Garamendi, Hon. John......................................... 37
Taylor, Rick................................................. 62
Tregarthen, Carolyn.......................................... 49
Documents Submitted for the Record:
[There were no Documents submitted.]
Witness Responses to Questions Asked During the Hearing:
[There were no Questions submitted during the hearing.]
Questions Submitted by Members Post Hearing:
Mr. Garamendi................................................ 71
Ms. Houlahan................................................. 84
Ms. Speier................................................... 77
Ms. Strickland............................................... 88
PRIVATIZED MILITARY FAMILY HOUSING:
UPDATE ON IMPLEMENTATION OF HOUSING REFORMS
----------
House of Representatives,
Committee on Armed Services,
Subcommittee on Readiness, Meeting Jointly with the
Subcommittee on Military Personnel,
Washington, DC, Wednesday, March 10, 2021.
The subcommittee met, pursuant to call, at 4:49 p.m., in
room 2118, Rayburn House Office Building, Hon. John Garamendi
(chairman of the Subcommittee on Readiness) presiding.
OPENING STATEMENT OF HON. JOHN GARAMENDI, A REPRESENTATIVE FROM
CALIFORNIA, CHAIRMAN, SUBCOMMITTEE ON READINESS
Mr. Garamendi. The committee will come to order. I am
required to read, but all of us have heard several times. So in
case you weren't listening to previous times, you are going to
get to hear it again, because I have been told I have to do it.
I would like to welcome the members who are joining today's
markup remotely. Those members are reminded that they must be
visible, on screen, within the software platform for the
purposes of identity verification when joining the proceeding,
establishing and maintaining a quorum participating in the
proceeding, and voting.
Members participating remotely must continue to use the
software platform's video function while attending the
proceedings, unless they experience connectivity issues or
other technical problems that render the member unable to fully
participate on camera.
If a member who is participating remotely experiences
technical difficulties, please contact the committee staff for
assistance and they will get you reconnected.
When recognized, video or remotely attending members
participating will be broadcast into the room via the
television internet feeds. Members participating remotely are
asked to mute their microphone when they are not speaking.
Members participating remotely will be recognized normally for
asking questions, but if they want to speak at another time,
they must seek recognition verbally.
In all cases, members are reminded to unmute their
microphone--unmute your microphone--don't fall out of your
chair and please don't hurt yourself.
Members should be aware that there is a slight lag of a few
seconds between the time you start speaking and the camera will
switch to you. Members who are participating remotely are
reminded to keep software platforms, video functions on for the
entirety of the time they attend the proceeding. Those members
may leave and rejoin the proceedings. If members depart for a
short period for reasons other than joining a different
proceeding, they should leave the video function on.
If members will be absent for a significant period or
depart to join a different proceeding, they should exit the
software platform entirely and then rejoin when they return.
Members are also advised that I have designated a committee
staff member to, if necessary, mute unrecognized members. Yes,
I can shut you down. Microphones to conceal any inadvertent
background noise that may disrupt the proceedings. Members may
use the software platform's chat function to communicate with
staff regarding technical or logistical issues only.
Finally, remotely participating members should see a 5-
minute clock countdown on the software platform's display, but,
if necessary, I will hit your remote button and you will lose
connectivity or at least voice.
Jackie, we got to do something about this. Why should we
take time to do that, I don't know.
So having said that, ladies and gentlemen, I call to order
this joint hearing of the Readiness Subcommittee and Military
Personnel Subcommittee of the House Armed Services Committee.
Over the course of the past 2 years, the Readiness Subcommittee
has been heavily engaged in oversight of the private military
family housing program through several formal committee events,
numerous meetings with families, advocacy groups, private
partners, and the Department of Defense personnel, we have been
at work to improve the quality of housing provided to our
service members and their families.
The National Defense Authorization Act for fiscal year 2020
contained a substantial housing reform package that included,
among other things, a tenant's bill of rights that serves as
the foundation of enhanced accountability for the quality of
privatized military family housing.
Over the last year, we have been heavily focused on
implementation of those reforms. And while there is still work
to be done, we have made some progress. However, we just heard
from family housing advocates and there is a whole lot more
that needs to be done. And this hearing is to move in that
direction.
I would like to thank those three partners who are with us
today for joining us and for participating in the hearing. I
suspect it has not been easy and certainly we have not always
agreed with what you have accomplished thus far and, of course,
we want more to be done. But at least you have shown up for the
discussion and you are prepared to answer what are undoubtedly
going to be tough questions from the members of the committee.
Unfortunately, another partner--I don't want to call him a
partner--but Clark Realty Capital has declined our invitation
to join this hearing. I am really upset about this. In fact, I
am gravely disappointed by their decision and it raises
concerns about their willingness and their ability to be
transparent and to be responsive not only to Congress, but far
more importantly, to the families that are in their homes.
So as we conduct our oversight of the privatized military
housing program, Clark Realty, you are clearly in the sights of
this committee and we will be assessing which of our oversight
tools might be brought to bear to get answers from your
organization. We have heard from advocates at Fort Belvoir in
the previous meeting before this committee commenced, and we
heard some very disturbing testimony.
So since Clark, you won't come to us; we are going to go to
you, and I invite my colleague, Ms. Speier, to join us on a
little sashay down the river to find out what is going on at
Fort Belvoir and why Clark has had such bad review. So heads
up, we are coming your way and we may not give you much time to
know when we arrive.
Another thing that we heard in the previous meeting was
that the bill of rights is good, but lacks teeth. So we are
going to see if we can find some teeth in how we might find it
to be enforced. So with that, just a couple of final words.
Military families deserve quality housing and they deserve
responsive property management and this committee will continue
to use all of the tools at our disposal to make sure that those
families get both quality housing and responsive answers to
whatever concerns they may have. So with that, my Ranking
Member, Doug Lamborn, it is your turn, then I am going to turn
to Ms. Speier and her ranking member.
Mr. Lamborn.
[The prepared statement of Mr. Garamendi can be found in
the Appendix on page 37.]
STATEMENT OF HON. DOUG LAMBORN, A REPRESENTATIVE FROM COLORADO,
RANKING MEMBER, SUBCOMMITTEE ON READINESS
Mr. Lamborn. Thank you, Chairman Garamendi.
Today, we will hear testimony from three of the four
invited partner companies that participate in the privatized
military housing initiative. I want to echo the chairman's
comments about today's witnesses. I very much appreciate the
engagement by the companies present today and am disappointed
that not all attended.
Over the past two and a half decades, the military housing
private public venture has been utilized to provide housing
options for our military families. Unfortunately, the program
has also experienced serious management, health and safety, and
oversight concerns. As someone whose district is home to 48,000
Active Duty military members, I know that our military families
deserve better. And I will not stop fighting to ensure that
these issues are resolved.
In 2018 and 2019, largely the result of our Reuters
investigative series, military families from across the country
came forward to share problems about their living conditions
under the program. This subcommittee held numerous hearings in
response to concerns about mold, rodents, poor customer
service, and poor management. It became clear that there were
systemic issues within the privatized military housing
initiative that required significant attention.
Both the NDAA [National Defense Authorization Act] for
Fiscal Year 2020 and the NDAA for Fiscal Year 2021 contained
bipartisan provisions to reform and strengthen oversight of the
program. One such provision was the requirement for the
Department of Defense, in coordination with the private
partners, to develop and promulgate a tenant's bill of rights.
The NDAA mandated 18 rights and since 2019, 15 have already
been implemented and available to military families. But I look
forward to hearing from our witnesses today on their
perspective of why the remaining three--universal lease,
dispute resolution, and 7-year maintenance history--have not
yet been made available to all of our military families.
I am also concerned with the financial stability of some of
the housing projects within the military housing program. The
military privatization initiative began as a way to modernize
family housing, improve efficiency, and grow reserves for
future improvements. Today, many of the agreements are roughly
at the midpoint of their 50-year term. While we are aware of
some significant new investments, the fact remains that old
housing units inherited into the program will need to be
recapitalized.
We must continue to assess the financial condition of the
agreements to ensure that new investments and improvements can
be made. I welcome ideas today from the witnesses on how to
find solutions in cases where projects are not receiving
adequate cash flow to sustain home quality for our service
members.
According to the military housing advocacy network, despite
the progress made in the past two NDAAs, thousands of military
families are still living in substandard housing. We just left
a briefing where we heard complaints from various family
advocacy groups, so we know that problems persist and we know
how important Congress' continued oversight is.
Two years ago at another hearing with program partners, I
made it clear that reform was needed and in a way that
preserves the sound financial footing of each project so that
military families receive housing commensurate with the
sacrifices that they make for each of us. Today I am committed
to seeing this through.
I want to thank the witnesses for your engagement, and I
look forward to learning more about your perspectives on the
program, your progress implementing congressional reforms of
the past two NDAAs so far, as well as your ideas to improve the
quality and experience of privatized military housing for our
service members and their families.
Thank you, Mr. Chairman.
And I yield back.
Mr. Garamendi. Thank you, Mr. Lamborn.
Ms. Speier.
OPENING STATEMENT OF HON. JACKIE SPEIER, A REPRESENTATIVE FROM
CALIFORNIA, CHAIRWOMAN, SUBCOMMITTEE ON MILITARY PERSONNEL
Ms. Speier. Thank you, Mr. Chairman. Thank you all for
joining us today. I want to welcome our witnesses. I appreciate
your attendance to these critical issues.
I want to call out the irresponsible conduct of Clark
Realty Capital and convey to them, you can run, but you cannot
hide and we will, in fact, be visiting Fort Belvoir. And I just
realized that five out of the nine installations in which they
have contracts are in California and I intend to see many of
those and hope, Mr. Chairman, you will join me in that as well.
I had wanted to ask them questions about lagging
implementation of the tenant bill of rights and resident
dissatisfaction at Fort Belvoir due to shoddy maintenance and
improper remediation of environmental hazards.
Our military families face unacceptable health and safety
issues every single day, and of all places, their homes. Taking
care of one of the most basic needs of our families, their
housing is something we must get right every time. And some of
you have failed in too many instances.
We have heard and seen firsthand the horror stories in
these houses from mold, to water leaks, to incorrect lead
abatement that has directly affected the health and safety of
these families. I have visited Fort Hood and met military
families that have been living in these unacceptable housing
conditions who have seen their children suffer health problems
after mold consumed their homes and belongings, even a baby's
crib.
You are solely responsible for the correction of these
defects and the management of these properties, so I want to
hear what you have done to make this right for the affected
families and why it took congressional action to get it done.
I yield back, Mr. Chairman, and I will have to excuse
myself very briefly to go make a presentation on the floor.
Mr. Garamendi. Ms. Speier, thank you very much for your
participation. Your responsibility on the personnel committee
is [inaudible] and I look forward to working with you
[inaudible] basis of California that would be good too.
Thank you so very much and when you return we will carry
forward. Thank you.
Mr. Banks.
STATEMENT OF HON. JIM BANKS, A REPRESENTATIVE FROM INDIANA,
RANKING MEMBER, SUBCOMMITTEE ON MILITARY PERSONNEL
Mr. Banks. Thank you, Mr. Chairman. I also want to welcome
our privatized military housing partners that are attending
today's hearing. Unfortunately, Clark Realty, one of the
housing partners we wanted to hear from declined the
committee's invitation. I would like to note that Clark is the
privatized military partner managing Fort Belvoir, an area
where a group of our military families are reporting
significant concerns.
I think you all will all agree that our military families
deserve the best housing experiences that we can provide them.
They should not have to worry about excessive mold, pest
infestation, asbestos, open sewage, radon gas, and other
environmental health conditions in some of the housing units.
They also should not have to worry about cumbersome
property management issues regarding lagging response times,
withholding work, and in some instances retribution for
bringing housing problems forward. We have got to do a lot
better.
Over the last couple of NDAAs, we have made extensive
reforms in military privatized housing to include the tenant
bill of rights. We also know some things have improved, but
what I would like to understand today is why we continue to
hear from some of our military families that things are not
improving. I would also like to understand from your
perspective what challenges still persist and why.
Thank you, again, for your attendance today.
And I yield back.
Mr. Garamendi. Mr. Aycock, if you will join us.
General Aycock. I have joined, sir.
Mr. Garamendi. Very good. Let's hear from you, your
testimony. We have your written testimony, so please proceed.
STATEMENT OF MG AL AYCOCK USA (RET.), MILITARY PARTNERSHIP
EXECUTIVE, CORVIAS GROUP LLC
General Aycock. Thank you very much, sir.
Chairwoman Speier, Chairman Garamendi, Ranking Member
Banks, Ranking Member Lamborn, subcommittee members, it is my
privilege to provide testimony about the implementation of
housing reforms for privatized military family housing.
Thank you for the opportunity to appear before you today.
My name is Al Aycock. I am a military partnership executive
with Corvias as well as a retired major general having served
more than 37 years on Active Duty with United States Army.
I am directly and personally familiar with the Military
Housing Privatization Initiatives. My family and I have lived
in on-post housing managed by the Army and in multiple homes
managed by three different MHPI [Military Housing Privatization
Initiative] private partners. Twelve of my last thirteen years
of service focused on leading and operating Army installations
from garrison level to the Pentagon taking care of service
members and their families. I have joined Corvias in May of
2019 because I am strongly compelled to ensure the highest
standards of customer service are provided to our service
members and families. I can attest that Corvias and Corvias
Property Management share this commitment as we serve more than
84,000 residents across 13 installations.
Today, I would like to talk to you about the progress that
has been made, the results, and the ways in which we, in
partnership with the services, continue to support our service
members and families. I will focus these comments on the
support of the tenant bill of rights and the emphasis on
customer service.
We actively advocated for the development of the tenant
bill of rights. We worked closely with the Department of
Defense and the services on the specific wording and quickly
agreed on the way ahead. We have been issuing our 7-year
maintenance history reports to our current and prospective
residents at all our installations since last December.
We will work closely with the Department of Defense and the
services to participate in their informal dispute resolution
process at the garrison level through the military housing
offices, as well as the formal process to higher installation
command.
We agree with the wording of the common lease template and
we have worked with the Department of Defense to ensure the new
leases will meet Federal and State requirements. Importantly,
Corvias continues to upgrade and replace aging housing
infrastructure to over $525 million invested over the last 2
years, $325 million in private funding, and $200 million from
the reinvestment funds.
This increases the more than 17,000 homes we have renovated
and the more than 9,500 homes built. We are listening to our
residents and we provide multiple opportunities for residents
to tell us how we are doing. This includes third-party surveys.
Last month Corvias Property Management received a national
award from SatisFacts for resident satisfaction based directly
on resident input.
We are analyzing those results in depth to ensure we
continue this success and also to determine the areas where we
can improve. Together, with our service partners, we make
ourselves available to residents through regular communication,
including town halls so that we can handle any issues brought
forward. We have maintained close communication with the
leaders in the Department of Defense and the services from the
Pentagon through the chain of command to the installation level
to ensure transparent, and fully accountable working
relationships.
We share this same information with a number of
congressional offices on a regular basis. In addition to our
emphasis on preventive maintenance and future improvements at
all our locations, we have responded to multiple natural
disasters, hurricanes, heavy rains, unseasonably cold winter
storms with an emphasis on ensuring the safety and standard of
living for each of our residents.
We have brought on the additional staff to handle these
issues while also ensuring a close working relationship with
the installation leadership and our response. I am here today
because this mission to support our service members and their
families is deeply personal.
I look forward to answering your questions and engaging in
dialogue on the way forward and serving our service members and
military families.
Thank you.
[The prepared statement of General Aycock can be found in
the Appendix on page 39.]
Mr. Garamendi. I thank you very much.
I will now move to Lendlease and Carolyn Tregarthen.
STATEMENT OF CAROLYN TREGARTHEN, MANAGING DIRECTOR, LENDLEASE
AMERICAS
Ms. Tregarthen. Thank you. Chairwoman Speier, Chairman
Garamendi, Ranking Member Banks, Ranking Member Lamborn, and
distinguished members, my name is Carolyn Tregarthen. I am the
managing director of Lendlease Americas Communities Business
and have direct oversight for all Lendlease work with the U.S.
Department of Defense. Thank you for inviting me to appear
before you today.
Lendlease has the privilege of managing approximately
40,000 single-family homes and approximately 200 apartments
across 28 installations in 12 States. Over 123,000 military
personnel and dependents call the Lendlease community home.
Distinguished chair and ranking members, you should be
proud of your role in reforming and improving military housing
in the fiscal year 2020 NDAA. This bill included many critical
provisions perhaps the most important of these is the tenant
bill of rights, which includes a dispute resolution procedure
to ensure residents' grievances are solved fairly and with
finality.
I would note that Lendlease was one of the first to agree
to every provision in the tenant bill of rights, and we were
the first to provide 7-year history of the home to all
prospective tenants. We have reviewed all aspects of our
customer service, resident engagement, and operational
activities. We reached out to our residents and appreciate
their feedback.
We consulted with advocacy groups such as the Safe Military
Housing Initiative and we worked extensively with our various
military partners to review all aspects of our operation. We
have made broad ranging improvements, including more frequent
inspections by Lendlease and their military partners, more
property management services performed by more highly trained
personnel, and more options for our residents to communicate
with us, including online and via our smartphone app.
With that backdrop, I would like to address some of the
concerns you heard from current or former residents at Fort
Hood. We are aware that certain families are not satisfied, and
that concerns me very much. Let me be clear: Fort Hood is a top
priority for me personally and for every member of my team. We
take all feedback seriously and we also believe that the issues
of the few do not represent the experience of the vast majority
who live in the Lendlease community.
To date, across our portfolio, Lendlease has invested more
than $7.4 billion to build over 15,000 new homes and renovate
more than 25,000 existing homes. As many of you know, with the
Army we recently announced a new private financing that will
bring an additional $1.1 billion to make further housing
improvements across several installations in our portfolio.
We expect that nearly half of these new funds will be used
at Fort Hood with the remaining funds to be spent at Fort
Campbell, Fort Wainwright, Fort Drum, Fort Knox, and our Army
installations in Hawaii. This has always been part of our
improvement strategy across all bases to ensure that we are
improving or replacing older homes. This new private capital
will expedite the renovation of more than 12,000 existing homes
and construction of more than 1,200 new homes across these
communities.
As part of our efforts to better manage the issues related
to older homes, and improve the housing experience for our
residents, we have instituted environmental plans at eight
installations, including Fort Hood which include the following:
Enhanced lead-based paint inspections; new mold inhibiting
paint and primer; utilization of enhanced HVAC [heating,
ventilation, and air conditioning] filters; expanding our
change of occupancy maintenance and improvement program,
including inspections by our military partner, improved
moisture testing to pinpoint the source of moisture in any
home.
I recently traveled to Fort Hood and met with the
leadership of the Fort Hood resident advisory board and the III
Corps command group. The 11 members of the Fort Hood resident
advisory board, who were chosen by their neighbors to represent
them, continue to give us invaluable feedback and will guide us
as we work together to improve housing on the installation. We
recognize that despite these positive advancements not everyone
will be satisfied.
As is their right, a small number of families have chosen
litigation rather than working with us through the dispute
resolution process, which is part of the tenant bill of rights.
If our residents have any concerns, there are many options
available to them. We would prefer to work directly with our
residents to resolve their concerns as we do on a daily basis.
We do not want to be litigants in a courtroom against our own
customers. We are eager to be partners, working together to
solve problems.
Lendlease shares this committee's steadfast commitment to
our military families. We have over 1,600 team members across
our portfolio working each day to provide the best service
possible. Our goals and yours remain the same. We both want our
military families to have a first-rate housing experience. They
expect as much and they deserve no less.
Thank you, and I look forward to your questions.
[The prepared statement of Ms. Tregarthen can be found in
the Appendix on page 49.]
Mr. Garamendi. About the mute button, it is my turn to also
listen to myself.
We now turn to Mr. Taylor, president, facility, operations,
renovations construction, for the Balfour Beatty Communities.
STATEMENT OF RICK TAYLOR, PRESIDENT, FACILITIES, OPERATION AND
CONSTRUCTION, BALFOUR BEATTY COMMUNITIES
Mr. Taylor. I am here, sir. Can you hear me okay?
Mr. Garamendi. Yes, we can.
Mr. Taylor. Great. Thank you.
Good afternoon, Chairman Garamendi, Chairwoman Speier,
Ranking Member Lamborn, Ranking Member Banks, and members of
the subcommittee. My name is Rick Taylor as you heard.
President of facility operations, renovations, and construction
for Balfour Beatty Communities, and I thank you for the
opportunity to testify before you today.
As I have indicated in previous testimony, Balfour Beatty
Communities takes the responsibility of serving those who serve
our country very seriously. Over the past 2 years, we have
heard your concerns and those of our residents loud and clear,
and we have taken several actions to improve the residential
living experience for our military residents.
Today, I would like to provide you with an update on the
status of our MHPI projects and highlight our shared commitment
to supporting the safety, health, and well-being of our service
members and the families that we serve.
First, Balfour Beatty Communities is fully committed to
implementing the housing reforms that were included in the
National Defense Authorization Act for fiscal years 2020 and
2021. Regarding the tenant bill of rights, we are working
closely with the military services towards implementing the
outstanding rights and completing the actions necessary to
administer those rights within our project legal documents. We
have already initiated 7-year maintenance history, processed a
number of our sites through a pilot program until the universal
lease is fully implemented, and we will continue to roll that
out as we approach that date.
Second, we have made significant investments to improve our
maintenance services and our operations, strengthened quality
assurance and compliance, and developed enhanced environmental
related policies and procedures, including those for mold and
moisture issues to deliver the highest level of responsive
customer service to residents.
My statements are backed up by both our own metrics and
customer satisfaction scores. During COVID [coronavirus
disease], our staff worked every day to provide uninterrupted
service to our residents. We instituted robust safety protocols
to limit any possible exposure to the virus and worked hard to
accommodate military members disrupted by COVID. We often
extended leases or short-term leases for those that lost
housing in the community.
During the recent extreme weather in Texas, Oklahoma, and
the surrounding area, our teams worked diligently on pre-storm
preparations, worked around the clock to respond to heating and
plumbing issues, accommodated impacted families in alternative
lodging, and rapidly deployed our national restoration and
repair resources. We were able to quickly resolve issues across
numerous bases while maintaining quality and kept residents and
installation command regularly briefed on our efforts and the
progress we were making throughout.
Third, we are doing our part to create more resilient,
sustainable communities in concert with the Department of
Defense's energy security goals. We are leveraging the latest
technologies to reduce energy costs and improve energy
resilience of domestic military installations.
We have more than 39 megawatts of solar across our military
housing portfolio, offsetting on average 25 percent of each
community's energy consumption. We are installing upgraded
energy efficient appliances and systems, including hot water
heaters, furnaces, air-conditioning units, lighting, and
plumbing fixtures. We are also leveraging energy savings
performance contracts at some of our sites.
Most recently at Fort Eustis and Fort Story in Virginia, we
are projecting savings of at least $12.2 million and making
energy efficiency improvements to over 1,000 homes. These
savings are invested right back into the housing project for
making other housing and community improvements.
Lastly, I want to briefly mention the financials for these
projects. In some cases, especially the case for older legacy
units that were not programmed for replacement up to this
point, the revenue stream is often inadequate to fund the
needed improvements. One of the most significant challenges we
face is the uncertainty of basic allowance for housing rates.
Other challenges stem from aging infrastructure and utilities,
sometimes owned by DOD [Department of Defense] or a third-party
utility provider.
We are not, however, waiting for others to address these
issues. We are evaluating a wide variety of alternative
financing options and collaborating with the services to find
new and innovative ways to generate funding for needed
replacements and renovations. These improvements to homes and
communities will help ensure the long-term viability of this
important program.
Thank you, again, for the opportunity to testify before you
today, and I look forward to your questions.
[The prepared statement of Mr. Taylor can be found in the
Appendix on page 62.]
Mr. Garamendi. Thank you, Mr. Taylor.
I will now turn to questions. I have one question for Mr.
Aycock, former major general.
Mr. Aycock, is the base commander responsible for the well-
being of all of the personnel on the base, families, enlisted
officers?
General Aycock. Yes, sir. Absolutely.
Mr. Garamendi. Can we then use the base commander as the
individual responsible for the housing issues?
General Aycock. Sir, yes. I believe that the chief of staff
of the Army said that very well in his testimony in our earlier
time.
Mr. Garamendi. It seems to me we have heard testimony today
that there are some base commanders that do not understand
their responsibility. We intend to take that up in the upcoming
NDAA.
All right. I would like now to yield the remaining time
that I have, which is 5 minutes, to Mrs. Luria.
Mrs. Luria. Well, thank you, Chairman Garamendi and
Chairwoman Speier for hosting this joint hearing and to our
witnesses for appearing today, and for yielding me this time. I
wanted to address my questions to Mr. Taylor.
Balfour Beatty Communities has several housing communities
in the Hampton Roads area, including the two you already
mentioned near Fort Eustis/Fort Story and then also near Joint
Base Little Creek-Fort Story and so I just wanted to talk to
you because we frequently hear from those residents who are not
pleased with their situation in housing and you have described
different efforts, as well as the efforts that were implemented
within NDAA last year to try to improve some of those
processes, but as a company, what steps are you taking to
improve and earn back the trust of those residents in the
communities with these processes and make them feel comfortable
and safe in their homes?
Mr. Taylor. Yes, ma'am. Thank you for the question. I think
if you refer to earlier testimony, I was before this
subcommittee about a year and a half ago almost now and at the
time, you know, we were undertaking a really thorough review of
all of our internal operations. We were asked in response to an
Air Force request to put together a performance improvement
plan that really allowed for us to look, you know, internally
in our organization at everything that we were doing.
We undertook significant changes, including a significant
reorganization. We enhanced our training programs. We looked
at, you know, ways of addressing some of the systemic issues
that the industry was facing. You know, we certainly weren't
immune to that. You know, we brought in a lot more internal
resources to address a lot of the environmental concerns that
were being discussed by residents and the services alike.
We engaged a lot of, you know, across the board
professional service providers to help us diagnose issues, why
they were occurring, and engaging professional firms to help us
with restoration efforts where those were necessary.
One of the key things that we did as an organization was,
if you think about the most complex system in any of our homes,
it is the HVAC systems.
Mrs. Luria. I understand your testimony that you have used
a single contractor throughout all of your properties. To try
and fix that.
Mr. Taylor. Yes, ma'am.
Mrs. Luria. Since we have limited time, I appreciate you
sharing the internal processes that you have implemented to try
to improve quality of life in the housing units that you manage
and I was curious about what barriers you have. Are there any
institutional barriers, any things within the law, you know, or
the contracts under which you currently operate that prevent
you from providing the best quality housing?
And before you answer, just anecdotally, something I have
heard from multiple housing units around the Hampton Roads area
and their management, not just Balfour Beatty, but others is
really a challenge to find a qualified maintenance workforce to
actually maintain these properties.
So is there anything that can be done there? You know, we
are always looking for opportunities for veterans to have good
quality employment when they leave the service. I know that we
have technical schools and community colleges in our area that
specifically have training programs for building maintenance.
Is there anything that can be done to tie this all
together? You can't go fix the houses if you really are
struggling just to find a workforce to do that.
So do you have any comments on anything that we could do to
help on that front?
Mr. Taylor. Yeah, sure. I will address your first issue. In
terms of are there any legal impediments to us doing the right
thing? Absolutely not. We are not constrained by anything of
that nature. You raise an interesting point in terms of, you
know, our ability to attract and retain quality workforce
because that is our lifeblood and that is one of the reasons
why we employed this third-party national contractor to assist
us with the most complex system in our units.
That has allowed for us to free up our workforce to address
all the other issues. One of the other important things that we
did this past year that we just invented in the organization at
the beginning of this year was, we looked at the level of
turnover that we see in our blue collar workforce and it was
alarming. And I am certain that all of the project owners face
a lot of the same issues.
So, you know, important for us is trying to stem the
flowing tide of folks that leave us. So we instituted a new way
to we called it a maintenance tech job family. And what it does
is, it has various steps within the organization, allows for
them to grow as their qualifications and certifications grow as
well. That will help to ensure that our maintenance workforce
sees a path for growth within the organization. If they are
willing to invest, we are willing to invest in them to improve
their skill set, then they can rise up the ladder.
That is a new change that we instituted that we are
confident are going to yield results that we want to create
more stability. It is hard to run an organization if you have
constant turnovers. So, you know, we are doing our best in
finding creative ways to stem the outflow of our staff.
Mr. Garamendi. Thank you very much for your testimony.
Mrs. Luria. Thank you for the insight into this issue and
my time is expired.
So I yield back.
Mr. Garamendi. Mrs. Luria, your time is expired. Thank you
so very much.
I am now going to turn to Mr. Lamborn.
Mr. Lamborn. Thank you, Mr. Chairman. Can you hear me okay?
Mr. Garamendi. Yes.
Mr. Lamborn. Okay. Thank you, and thanks for having this
hearing.
Mr. Taylor of Balfour Beatty Companies, Fort Carson is
located in my district and it is the home to over 25,000
military service members as well as their families. Back in
2018 and 2019, Fort Carson family homes was subject to the same
concerns about substandard living conditions we heard about
with privatized housing throughout the country. Since that
time, how have you worked with your Army partners to implement
the reforms and requirements of the past two NDAAs and what
initiatives has Balfour undertaken to improve maintenance
responsiveness, ensure that service members are receiving the
information they need, and having issues promptly resolved to
their satisfaction?
Mr. Taylor. Congressman, thanks for the question. I think
in terms of what we have done to improve the relationship at
the installation, you know, certainly the Army has, you know,
put a keen focus on this ensuring that there is very active
engagement from the garrison commander on down regarding
housing issues.
We enjoyed a very close-knit relationship there. I say
close-knit in terms of we are rowing in the same direction,
ensuring that we are keeping, first and foremost, the quality
of life of our residents, the responsiveness that is necessary
for us to meet the needs of our residents. We have adopted a
lot of technological advancements that make it much easier for
our residents to communicate issues with us.
They have access to our online portal. They have an app
that is at their fingertips that allows for them to communicate
regularly, you know, with our staff if they have got an issue.
That online portal allows for them to track, you know, their
maintenance issue from cradle to grave. They get frequent
updates if it changes in status.
One of the other things that I heard one of the other
individuals mention was the satisfaction scores, and we have
seen increasing satisfaction scores. Those are conducted by a
third-party company that give us that feedback, but we are only
capturing a very small percentage of residents because,
generally, if we are in a resident's home doing their work, we
generally are only capturing 15 to 20 percent of those
residents.
What we moved to this past year was another way to
ascertain whether or not a resident's satisfied with the
quality of work. So we moved to something we call key texting.
Any time we complete, in our minds, the work order that the
resident required, they automatically get a system generated
text message asking them regarding their satisfaction with the
work performed.
It is a very binary response. They either text ``Y'' for
yes if they are satisfied, ``N'' for no if they are not. Any Ns
we can immediately follow up with to find out what we need to
do to rectify their situation. I share with you the concerns
about some of the older housing stock at Fort Carson, and I can
tell you that is, first and foremost, on our minds.
We have been working in close coordination with the Army
for the past several months to look at ways to identify
additional funding so that we can address the legacy issues
that are really causing us a lot of concern.
Bear in mind, a lot of those aging housing units are
sitting on very old aging infrastructure that further
complicate issues for us and that is certainly an area that I
think Congress could lend a hand in identifying additional
funding to address, you know, some of the systemic underlying
infrastructure needs of the installation.
Mr. Lamborn. Now along those lines, Mr. Taylor, you
announced--your company announced $400 million to recapitalize
housing projects that you obtained and are able to invest. Will
that include any units at Fort Carson or is it for other parts
of the country?
Mr. Taylor. Well, sir, I don't know that--I don't believe
we have made a public announcement of that. I can tell you
that, you know, Fort Carson, in addition to many of our
installations, we are working in close coordination with
military leadership to identify the opportunities for us to
either refinance or, you know, recapitalize the funding streams
that exist inside the projects.
With regard to Fort Carson, we are pretty far down the road
with the Army and we hope to be in a position to be able to
announce something very soon. It is just too early for me to
make an official comment on that, but certainly as that
develops, we would be happy to come and brief you on the status
of that effort.
Mr. Lamborn. Okay. Yeah. Please keep me and my office
informed on that issue. My notes said a little differently, but
maybe we were jumping the gun or assuming something, but I
await your announcement.
And Mr. Chairman, thank you for having this hearing, again,
and back to you.
Mr. Garamendi. Thank you, Mr. Lamborn.
I now turn to Ms. Speier.
Ms. Speier. Thank you, Mr. Chairman, and thank you all for
participating, again. I have a series of questions that I would
like each of you to answer and we will start with you, Major
General Aycock, then to Ms. Tregarthen, and then to Mr. Taylor.
Are you privately held companies?
General Aycock. Yes, ma'am, we are a privately held
company.
Ms. Speier. Ms. Tregarthen.
Ms. Tregarthen. We are a public company listed on the
Australian Stock Exchange.
Ms. Speier. Mr. Taylor.
Mr. Taylor. We are publicly traded in the U.K.
Ms. Speier. What percentage of your revenues are ascribed
to overhead?
General?
General Aycock. So, ma'am, I believe--I will have to get
back with you about the exact percentage that are ascribed to
overhead, but we are a very small company and the overhead is
extremely small at the headquarters level. To give you a
precise answer, I would like to get back with you with your
staff.
[The information was not available at the time of
printing.]
Ms. Speier. That is fine. How many employees do you have?
General Aycock. So, ma'am, we had it broken down into a
grouping of each individual garrison has a separate grouping of
folks. They are in separate LLCs and within the headquarters we
are still a very small company and, again, I can give you the
precise numbers across the entire board.
Ms. Speier. All right. So you will provide us the number of
employees in each of the garrisons and also your overhead as
compared to revenue.
General Aycock. Yes, ma'am. Absolutely.
[The information was not available at the time of
printing.]
Ms. Speier. All right.
Ms. Tregarthen?
Ms. Tregarthen. Congresswoman, I don't have that
information to hand today, but I am very happy to follow-up
with that and submit it to the committee in writing.
[The information was not available at the time of
printing.]
Ms. Speier. All right. We appreciate that.
And Mr. Taylor?
Mr. Taylor. Unfortunately, ma'am, same for me. Rather than
give you a misleading number, we would be happy to follow up
for the record. In terms of number of employees, our military
housing division employs a little over 1,200 employees
nationwide.
[The information was not available at the time of
printing.]
Ms. Speier. Okay. And Ms. Tregarthen, do you have the
number for number of employees?
Ms. Tregarthen. Congresswoman, we have approximately 1,600
employees working across our military housing portfolio.
Ms. Speier. All right. Do each of you recognize your
responsibility to comply with State and local laws concerning
habitability of housing?
General Aycock?
General Aycock. Yes, ma'am, we do.
Ms. Speier. Ms. Tregarthen?
Ms. Tregarthen. Yes, Congresswoman, we do.
Ms. Speier. Mr. Taylor?
Mr. Taylor. And I would just offer up that we and I think
other project owners recently responded to an inquiry from
Senators Warren and Tillis and we have a more fulsome response
around our approach to these issues and we would be happy to
submit it to the record to the committee.
[The information was not available at the time of
printing.]
Ms. Speier. Well, regardless of your fulsome explanation,
the truth of the matter is that you are, in fact, responsible
to comply with the laws of cities and States as it relates to
your housing conditions and it is my understanding through
talking with some of the advocates that some of your employees
like to hide behind some argument that somehow local laws do
not apply, which is a falsehood.
Okay. You may not be able to answer this as well, so if you
would provide this to the committees when you provide the other
answers, how many of your homes are offline at each of your
installations during a 6-month period of time and how many of
your families move before the lease is up? Do each of you pay
for damaged personal property when a unit becomes
uninhabitable?
General Aycock?
General Aycock. Ma'am, I will start with the offline. That
is a flexing number, and we will give you an average of a 6-
month timeline that will tell you about how many houses we have
offline. That is also not just affected by environmental
conditions; sometimes affected by the renovations on those
post.
So we will try to set that so it is very clear when we
provide that. And in terms of damages, if there is something
that happened as a housing condition and we go through the
process with the tenant and it is our fault, yes, the answer is
yes, we will make sure that that is taken care of.
Ms. Speier. Ms. Tregarthen?
Ms. Tregarthen. So Congresswoman, we will provide the
information in terms of units online, units vacant, et cetera.
That is something we track on a very regular basis, so we will
provide that to you to the committee in writing. And in terms
of damaged household goods, again, if the damage is due to a
condition in the house, then yes, we do pay for those goods.
[The information referred to was not available at the time
of printing.]
Ms. Speier. Mr. Taylor?
Mr. Taylor. Yes, ma'am. My responses would be identical to
the prior two.
Ms. Speier. All right. Mr. Taylor, following the 2019
revelation that some of your projects were falsifying
maintenance records, what steps has your company taken to hold
those responsible accountable?
Mr. Taylor. As I previously testified, Congresswoman, you
know, we are actively still involved in discussions with the
Department of Justice. I can assure you that we are making
progress there and we provided regular updates to the
professional staff of Chairman Garamendi's committee in terms
of how that is progressing. Unfortunately until they conclude
their investigation, I am not at liberty to discuss that issue.
Ms. Speier. All right. Can you at least explain for those
of us who may not have been aware of this before how was it
first uncovered that there was falsification of maintenance
records?
Mr. Taylor. We identified the issue, ma'am, and we
undertook hiring a third-party law firm to help us investigate
and we took that issue forward to the Department of Justice and
have been sharing our progress with our own internal
investigation along the way.
Ms. Speier. All right. I thank you.
Mr. Chairman, I yield back.
Mr. Garamendi. Thank you, Ms. Speier.
Mr. Banks.
Mr. Banks. Thank you, Mr. Chairman. Concerns over
environmental health exposures in some of these units have
prompted NDAA's 2020 section 3053, which requires DOD to
establish a process to identify, record, and resolve
environmental health hazards in housing. My question for all
three of you, has the DOD provided any direction to you and
where in the process are you in implementing these reforms?
I will start with General Aycock.
General Aycock. Thank you, sir. That is a great question,
and we concern ourselves every day with safe living conditions.
That is the thing that we have to do. As you know, we have gone
through several natural disasters and so that sometimes
introduces environmental effects around the house and we take
care of the families immediately when those things happen.
We have our own internal processes. You asked me the
specific question, has DOD provided a specific guidance and
while we are working with DOD on that, we have not yet been
giving the precise implementation of that directive.
Mr. Banks. Okay. Thank you.
Ms. Tregarthen?
Ms. Tregarthen. Thank you, Congressman. We also have been
working with the services consistently since the fiscal year
2020 NDAA to ensure that those measures are implemented
appropriately.
Mr. Banks. Okay. And Mr. Taylor?
Mr. Taylor. Likewise, Congressman. I can tell you that, as
I mentioned in my brief opening remarks, we have taken a lot of
additional steps to enhance our own internal environmental
staff so that we can provide good oversight and direction to
our site teams. And, you know, we exclusively use third-party
agencies to help us assess where those conditions exist and
then likewise engage expert third parties to help us with
remediation efforts. It is a significant issue for the industry
and one that we certainly don't take lightly.
Mr. Banks. Thank you for that.
You know, I got to say--it has already been said, but I and
the others who participate are very disappointed and surprised
by what we heard in the last panel--in our first panel of
housing advocates at various military installations. These
families are relying on all of you and they are relying on us
as well to provide proper oversight.
So I have a more general question for you: How do you
believe that military families that you are serving measure
your performance and what are you doing to get better at
listening to them? Tell us about your internal processes to
improve the way that you listen to them.
I will start, General, with you.
General Aycock. Sure, again. Thank you. We are taking extra
time to communicate with our residents. We make sure that we
have folks in town halls who can be held accountable. They are
transparent with what they can do. If there is an issue that
comes up, they deal with the resident on the spot as quickly as
possible.
We have open communication through a number of surveys.
When we move somebody in, we immediately ask them how well that
process went and we get graded on it. When somebody does a work
order, we ask them to give us the same kind of feedback.
When we move somebody out, we ask them for feedback at that
particular time also. We maintain communication up and down the
chain of command.
Even going back to the initial question that Chairman
Garamendi asked me. We have great relationships with the senior
commanders and the garrison commanders on the Army
installations and the [inaudible] commanders and the mission
support commanders on the Air Force installations. And when we
have a problem, we work together as a team to make sure that
the chain of command understands what the issue is and how we
can work together to resolve it.
Mr. Banks. Ms. Tregarthen?
Ms. Tregarthen. Thank you, Congressman.
Thank you for the question. We have a number of areas that
we use [inaudible] and have the right conversation. We think
about [inaudible] maintenance experiences [inaudible] points.
We do receive we have establishes [inaudible] at all of our
regular basis that helps additionally, we have [inaudible]
allows us to get better communication, better messaging, better
information, understand what is going on and what our residents
are thinking, feeling, and what they would like to influence
about the installation that they live on.
Mr. Banks. Thank you.
Mr. Taylor?
Mr. Taylor. Congressman, very similar response. Surveys are
certainly of great use, satisfaction is I think a great tool.
As I mentioned, unfortunately, we are only capturing generally
15 to 20 percent of our residents.
So we have decided to move forward with our key texting
program so that we can get broader coverage so that we get more
instantaneous feedback from our residents. That has been
extremely successful whereas satisfaction may only be capturing
15, 20 percent of residents.
Statistically, we are getting 70 to 80 percent response
rates where we rolled out the key texting. So we are encouraged
by the fact that we are hearing more frequently from residents
in terms of their satisfaction.
We, like others, encourage our site team members to make
warm calls. It doesn't have to be in response to a work order.
Just trying to stay in touch with what our residents want,
desire, what their needs are.
So there is a lot of that that happens. We engage in
frequent town halls with our installation command leadership
and our housing partners and that, you know, that has been a
really useful forum for us to hear at the same time issues that
residents are facing so that we can collectively address the
issues time and again.
We do utilize other forms of technology that gives us
really instantaneous feedback on how we are tracking on these
key performance metrics. You know, we utilize a tool that we
invested in last year that gives us clear visibility of what
those scores look like and the comments that we hear from
residents.
Beyond that, you know, if a resident is unsatisfied with
any performance issue, there is a process by and which they can
go about having their issue addressed.
First and foremost, they are encouraged to meet with one of
our managers on the site. If their issue is not resolved, we
invite them to submit a request through our--what we call BB
[Balfour Beatty] Cares hotline. I can tell you that that
reaches the corporate office.
I see 100 percent of those issues that have not been
resolved by our local leadership team and to the extent that we
can't still satisfy the resident's issues, then they have an
outlet through their housing management office as well.
Anything that reaches their desk, we collectively engage to
figure out what we need to do to resolve any issues.
Mr. Banks. Thank you. I yield back.
Mr. Garamendi. Thank you, Mr. Banks.
I am going to call on Ms. Houlahan if she is still with us.
There are votes going on, so it is possible that members will
vote and return.
Ms. Houlahan.
Ms. Escobar, you are next, then. Five minutes.
Ms. Escobar. Mr. Chairman, thank you so much, and Madam
Chair. I really just have a very simple question, and this is
based on an idea that was floated by some of our advocates, and
their stories, by the way, were just so heartbreaking.
To each one of our panelists, can you tell me, do you--so
you have a lease with the Federal Government, and if so, how
long is that lease?
General Aycock. So ma'am, I will start. There is a ground
lease that all the military housing privatization initiative
groups run. There may be some variation in that, but it is for
the length of the partnership. And in most cases, it is going
to probably be about 50 years.
There is a key with that particular lease. It is actually
operated through the Army Corps of Engineers, and there is a
consistent check on that lease to make sure that the right land
is being used for the right purpose. There is an accountability
chain for that particular ground lease.
Ms. Escobar. And, Mr. Aycock, before I move on to the next
panelist, how long into your lease are you?
General Aycock. That would depend on the property, ma'am.
Each of the properties came online at different times, so each
lease would be contingent upon the LLC that runs that
particular installation.
Ms. Escobar. Okay. Thank you.
General Aycock. Yes, ma'am.
Ms. Tregarthen. Congresswoman, I have a very similar
answer. Our ground leases are 50 years, and we are
approximately 20 years into those--each of those ground leases.
But similar to the previous panelist, it does depend on the
date when the project actually started.
Ms. Escobar. Okay. Thank you.
Mr. Taylor. And a similar answer for me, ma'am. With
respect to Fort Bliss which I know sits in your district. We
reached financial close on that project I believe in 2004, so
that will give you a sense of, you know, how far we are along
in your back yard.
Ms. Escobar. Okay. Thank you so much. I yield back.
Mr. Garamendi. Thank you, Ms. Escobar.
Mrs. Bice.
Mrs. Bice. Thank you, Mr. Chairman.
So I am curious. You talked just briefly about the length
of these contracts. Why a 50-year contract?
General Aycock. So, ma'am, I will start. This is Major
Aycock, retired. It is the time it takes to do the financing of
the actual redevelopment. The challenge that you had with the
old system is you had appropriated funds, and the appropriated
funds were just one year long. You really can't redevelop up
front.
And so the partners take some risk by going into an area
and putting money into it early, and then they count on payback
later on. And so most of the organizations are going to reach a
crossover time sometime about--you know, the halfway point of
the actual ground lease would be common. It is not going to be
the same at every place because each one has a different
dynamic in terms of the income, but that is what it takes to
get private investors to put their money into the program.
Mrs. Bice. Just in follow-up, is there more than one
developer on a specific base? Are you signing these 50-year
leases, and you are the only provider on those bases?
General Aycock. So, ma'am, again, I will start that
process. In general, yes. That is the common way that it was
done. I am not 100 percent familiar with all the other
developments, but I don't know of one where there is more than
one military housing privatization partner on those particular
installations. There was actually a competition at these bases,
and there were multiple partners who would provide an estimate
to the team on the base, and the team on the base would pick
the partner that they thought had the best overall bid.
Mrs. Bice. Thank you for answering that.
Congresswoman Speier mentioned earlier about municipalities
or cities and counties having oversight. Who is reviewing the
actual construction or renovation projects and approving the
habitability of these particular homes?
And maybe Rick or Carolyn may be able to speak to that.
Mr. Taylor. Carolyn, would you like to take it?
Ms. Tregarthen. Sorry, Rick. Certainly.
So, Congresswoman, thank you for the question. Oversight of
any development work or building is subject to an independent
construction consultant who is independently appointed and has
oversight of both the design process and the construction
process. And our service--the services as our services partner
are also part of that process.
Mrs. Bice. And if I can follow up. Who appoints that
independent inspector?
Ms. Tregarthen. We appoint that inspector in conjunction
with the military service partner, so either the Army, the Air
Force, or the Navy.
Mrs. Bice. Mr. Taylor, do you have anything you want to add
to that?
Mr. Taylor. The same answer on that issue. I will say in
response to one of your earlier questions, is there any
installation where we have got two project owners, the only one
that I am aware of is one that we are a party to is Moody Air
Force Base in Georgia because that was awarded separately. The
on-base housing was awarded earlier. They identified a deficit
of housing, and so the second part of that was a project that
we won that was combined with Dyess Air Force Base in Texas.
If I could, I would like to just kind of go back to your
earlier question regarding the length of these ground leases
and why 50 years. And I think it is kind of important to kind
of reflect on what was the state of military housing when this
initiative was started. You know, OSD [Office of the Secretary
of Defense] estimated it was going to take $30 billion, plus or
minus, to restore housing. So that is why--you know, that was
one of the motivations for the program.
But turning to a private sector entity, what was important
was to fix the amount of time at the right spot such that we
could get long-term financing. That long-term financing enabled
for us to go to the bond markets, the financing markets, and
identify as much up front cash as we could possibly get.
The tenure of those agreements is what allowed for us to
raise the amount of money that we did. It is no different than
in simplistic terms, if we are buying a house, you are buying a
house, I am buying a house, you can afford more house on a 30-
year mortgage than you can on a 15-year mortgage. So having the
length of time on these ground leases enabled for us to really
raise significant amounts of capital on the front end.
Mrs. Bice. Okay. My time has expired. I want to thank you
all for your willingness to participate in today's hearing.
And I yield back, Mr. Chairman.
Mr. Garamendi. Thank you, Mrs. Bice.
There are votes going on. I am going to leave in a few
moments, but I will take one more. I think Mr. Johnson--wait a
minute. I am going to pass the gavel to Ms. Jacobs, and she
will continue with some questions.
Ms. Speier will be back in a few moments, and I will see
how fast I can run the 300 yards. So, Ms. Jacobs, please
continue. Our next witness will be Mr. Johnson.
Ms. Jacobs [presiding]. Perfect. Mr. Johnson, 5 minutes.
Mr. Johnson. Thank you. Can you hear me okay?
Ms. Jacobs. Yes.
Mr. Johnson. Great.
General Aycock, thank you so much and all of you for your
testimony. My district is home to Fort Polk and the Joint
Readiness Training Center. And, of course, Fort Polk is one of
the installations serviced by your company. I am curious if you
could provide us with an update on where things currently stand
on implementing all the provisions of the tenant bill of rights
and include dispute resolution and rent segregation and the 7-
year maintenance history.
General Aycock. Absolutely, sir. We have been a leader,
along with the other companies that are here, in making sure
that the tenant bill of rights is on board. We support the
dispute resolution process, and we will be a part of it, and
that is where the rent sidebar comes in. That will be decided
at that particular level. We are issuing our 7-year maintenance
history in advance, and I believe the other companies are doing
the same. That is where we are going.
We have been working very carefully with the Department of
Defense to make sure that the common lease template is up. We
have said that was good. We are trying to help to make sure
that the State and Federal parts of that both work. We are a
full advocate behind that particular effort, sir.
Mr. Johnson. I appreciate that. And that diligence, as you
know, the community there is deeply vested, and they are big
supporters of the base and all of that, and everybody works
together. Fort Polk Progress is one of the big groups that
advocates, and I know you have interacted with all of them, so
they are all watching closely. We appreciate the progress.
What are some of the challenges that you have come across
in implementing some of those specific items?
General Aycock. Sir, we believe that there haven't been any
real problems internal to our company about implementing all of
this. John Picerne, our CEO [chief executive officer], has
completely done a relook at the entire company, and he has made
sure that the right people are in the right places and has
gotten on board with where we need to direct themselves. And so
we are behind the Congress' directive and the DOD's
implementation.
Mr. Johnson. That's great. Shift gears just a little bit in
my remaining time. Louisiana had a tough year, as I know you
are probably aware. We got hit pretty hard with the pandemic,
and then we had a record hurricane season, and then we had this
winter storm, kind of a once-in-a-lifetime event that just
happened. We feel like Job in the Old Testament. We are just
getting beat up all over.
But I just wonder if there have been issues related to
those weather events and the natural disasters and how your
company has been addressing those issues. Have you had big
problems with that?
General Aycock. Sir, thank you for the question. We have
had the normal challenges and issues that anybody would have in
dealing with two hurricanes and a major winter storm. I think
the difference has been the positive attitude and the go-get-
it-done type approach that the garrison and the senior
commander have taken.
We had a large session at the end of October where we had a
lot of people travel there, and we all sat down. Myself and Mr.
Sims from my company sat down with General Doyle and his team
to make sure that he was happy. We have created a common
dashboard that tells him every day what is going on on a day-
by-day basis. We went and did initial triage and emergency
repair. We did the assessment of non-emergency repairs.
We are now in the scope and schedule development piece. And
as you know, we have done all of the mitigations that we are
required to do. We have none required left. We have got--728 of
the homes required interior reconstruction. We only have 3 in
progress and only 14 remaining to reach completion.
In terms of roof repairs, we are working hard on that;
2,652 roof repairs required. We have got 187 in contract, 50 in
progress, and 1,605 completed. We are going to go to the
quality assurance piece as we walk along the way, and then
after those two hurricanes came, we had this winter storm.
At Fort Polk, there were 215 homes affected. 56 of those
were homes that had been previously damaged in the hurricanes.
We had to take care of 16 families who got displaced
temporarily, but we have been working on those.
So we have got 123 mitigations required, 31 complete, 13 in
progress, and the repair work goes on. And we are clasped at
the hand with the garrison and the senior commander.
Mr. Johnson. That is a great update. I appreciate the
details there. And, General, I just want to thank you for your
service and appreciate you being with us today, and I yield
back.
Ms. Jacobs. Thank you. I will now yield myself 5 minutes
for the purpose of questioning.
My first goes to all of you. Do you agree that military
families should be treated as paying customers while living in
your military housing facilities since they give up their BAH
[Basic Allowance for Housing] in order to utilize this military
housing?
General Aycock. So, ma'am, we treat our residents as though
they are ours. They are the folks who came to us and asked to
live in our houses. They had other choices to go to, and so we
treat them as we would treat a resident anywhere else in the
portfolio. We try to take care of the military families and
their soldiers.
Ms. Tregarthen. Congresswoman, I think we all agree that
our military families expect and deserve quality housing, and
we are firm in our commitment to provide that for them. We
drive to continuously improve so that the military families are
provided with that level of housing that they expect and
deserve.
One of the things that is extremely important to us is
working with our families as partners to make sure that they
are getting what they need, and we are there hand in hand with
them to deliver what they expect.
Mr. Taylor. And I will just add, we certainly understand
that our military residents have a choice, and we want to be
their housing option of choice. And so, you know, it is quite
disappointing to any of us in our organization, I am sure I
speak for everyone, that if we find that we have lost the trust
of our residents because we are not addressing their daily
needs, then we ought to be held to account and make sure that,
you know, we figure out what we need to do to improve.
We have great admiration for the sacrifices that our
service members and their families make, and they shouldn't
suffer from substandard housing. So it is down to us to make
sure that we are providing first-class service, and where we
fall short, it is down to us to make sure that we diagnose why
and where we need to improve.
We do that in close collaboration, I can tell you, with our
service partners, more so today than ever in the history of
this program. And I think that is a benefit that is going to
pay dividends long term.
Ms. Jacobs. Well, thank you. And I am glad we all share the
sentiment because I just want to share with you some of the
complaints that I have heard from my constituents very
recently.
So I heard recently from one family where the military
spouse was pregnant, and their home suffered severe water
damage, resulting in the ceiling collapsing into the kitchen,
all because maintenance had not been kept up on this home.
Another constituent said that when mold was found, instead
of fixing the problem, it was painted over. Another family was
forced to live with black mold in the ventilators for weeks
while they waited for a response.
I have also heard from an active military member who has
seen four of his neighbors' cars stolen because of the lack of
security and others who have old and outdated refrigerators
that are too small to support their families. And I am sure I
don't need to tell you that old appliances means they have
higher costs for energy and electricity.
I was wondering if you could speak to what you are
specifically doing to prevent these kinds of issues from
occurring, and if you could talk about why it has taken so long
to implement many of these reforms that have already been
discussed today.
General Aycock. So, ma'am, I will step in. We take every
complaint, every issue that a resident may have seriously. We
have multiple ways for those issues to be communicated to us.
We have checks that go in behind and make sure that quality
control is done on work orders.
Each time that we have a resident contact, we try to make
that a positive effort to ensure that the resident has what
they need, what they deserve, and what we should provide.
Ms. Jacobs. Thank you, Major General Aycock.
Ms. Tregarthen.
Ms. Tregarthen. Congresswoman, thank you for your question.
Obviously, I can't comment on the specific cases that you have
listed, but let me talk about some of the things we do with our
residents.
So I will start from our change of occupancy process. When
a resident moves out of a house, before we make that home
available to our next resident, we do maintenance on it as
required, and that may include replacing appliances. It may
include painting. It may include a number of things.
That home is then inspected by our property managers. It is
then we have a follow-up inspection by our military partner.
And after the home passes those two inspections and is said to
be ready for a resident to move into, it is made available to a
prospective resident to inspect before they sign a lease.
When that resident does sign a lease and move into that
home, we then do an orientation with that resident of that
home, and that includes things like how does the HVAC work? How
do you change your filters? Where is the exhaust fan in the
bathroom to make sure that the resident understands the home.
We are also very interested in making sure they understand
how to contact us if they have any issues, and that may be by
our phone number, it may be by our app, it may be by our
portal, or it may be by their local resident advisory board
member.
Additionally, we provide that resident with a resident
guide which outlines a lot of the information they will have
been told both on the orientation but also, more broadly, how
to contact us how different things work.
So we try and make sure when that resident moves into that
home, they do understand firstly the home, how everything
works, and also how to contact us should they have any
questions or follow-ups. We then----
Ms. Jacobs [interrupting]. Thank you. Sorry. I appreciate
all of your work. My time has expired.
I will now yield 5 minutes to Dr. Jackson. I think you
might be muted.
Dr. Jackson. Yes, ma'am. Thank you. I appreciate it.
I just want to say thank you to the people that are
testifying today for being here today. The military housing
privatization is an issue that was created in 1996. That was
actually while I was on Active Duty in the United States Navy.
Congress started this initiative because the Department of
Defense does not need to be in the business of housing, which I
agree with, and we can utilize our private sector partners to
provide service members and their families with suitable living
conditions.
In 2018, it came to light that military families were
experiencing issues with their homes. Much of that I listened
to today and am sympathetic to. Subsequently, my colleagues in
both the House and the Senate held a series of hearings and
briefings and passed new guidance to raise the standards for
the quality of housing for our service members to experience.
Everything I have heard about privatized housing over the
last few years has been negative for the most part. I will say
that. But today I want to talk about at least one good-news
story based on my brief time in Congress which happened in my
home district of Sheppard Air Force Base. The installation
commander, General Bell, has already been a great teammate for
me.
He has taken me out. He showed me all over the base. He has
gone into lots of detail about the housing issue. He and his
team have operated with their private partner to provide the
airmen there with what appears to me to be really good
conditions.
By no means has Sheppard been perfect. And we talked about
a lot of the problems there, but they are trending in the right
direction, and they are working hard to make things better. I
think that we should give credit to General Bell and to his
leadership at Sheppard Air Force Base in particular, and I
think that is a big part of the solution here.
Mr. Taylor, I wanted to thank you and all of your witnesses
for appearing before this committee today and for the
transparency you provided to me and my staff on privatized
military housing. I just wanted to point out that in my
opinion, a partnership only works if both parties are involved
and willing to work together.
Sheppard Air Force Base I think is an example of how an
installation commander and a private company can and should
work together hand in hand to provide the best possible housing
and the best possible services to our service members who have
earned that.
From everything I have seen and heard from General Bell and
from Balfour Beatty, they have worked together to solve a lot
of these problems and to engage the community. Mr. Taylor, I
just wanted to know if you could speak to what has been done at
Sheppard Air Force Base to foster this strong relationship
between the leadership and your company and the community and
where could we improve this and how can others use this
example.
Mr. Taylor. Thank you, Congressman. I really appreciate the
kind remarks. We do have a very good team on the ground there
that we are extremely proud of. There have been some bumps in
the road, but we have been working through issues of the past
together with our military partners, and it is just testament
to, you know, the good things that can happen when we align our
interests and focus our energies in the right areas.
You know, with respect to, you know, how were we able to
get there at Sheppard, it is not unique to Sheppard. I am
confident to say that, you know, this is really the outcome of
the significant efforts that we have put forward over the last
2 years to really look hard at the way that we are running our
business.
There are many things that I mentioned, a performance
improvement plan in the past. There are so many elements of our
business that are embedded in that that really have been
transformative in the way that we are approaching our business,
you know.
And so, you know, the fruits of that labor are really
starting to show with your own personal experiences and what
you are hearing at Sheppard.
So we are proud of that effort. We are not there yet. We
know that we still have room to improve, but clearly, based
upon the key performance metrics that we are tracking, I can
confidently say we are tracking in the right direction.
We still have room to improve, but thankfully, you know,
with the dedication of our teammates and, you know, the
outreach and support that we are getting from installation
commanders, it yields the type of result that you just
described, so thank you.
Dr. Jackson. Yes, sir. Thank you. I will be the first to
say some of the stories we heard today are truly horrifying,
and we have to fix these problems, but I will say I just wanted
to point out at least from my brief experience that I think
there are areas, a few areas around like the one I cited where
we are moving in the right direction when it comes to housing.
And I am really looking forward to working with my
colleagues here on the Armed Services Committee to make sure
that we stay on the right track and we do the right thing and
take care of our service members. So with that, thank you,
Chair, and I yield back the rest of my time.
Ms. Jacobs. Thank you. And with that, I will pass the gavel
back to Chairman Garamendi.
Mr. Garamendi [presiding]. And you will also tell me where
we are in the order.
Ms. Speier, it is your turn.
Ms. Speier. Mr. Chairman, I will yield and refrain from
asking my questions until the end if other members would like
to go ahead.
Mr. Garamendi. Okay. I believe that everybody that is still
with the committee on the screen, I think they have all asked
questions, so we can do one more round of questions here with
those that are still with us. I see Ms. Escobar is still here.
Are there other members that want to ask another round of
questions?
Ms. Speier, if you have another round, and then I will take
my turn, and we will wrap this thing up.
Ms. Speier. Okay. Thank you again, all, for being here. It
has been a little truncated because we have had votes on the
floor, so I apologize for being in and out.
I would like to ask you. Have you ever not received
incentive pay at one of your installations, and we will just go
down the list. General Aycock?
General Aycock. Yes, ma'am. There have been occasions where
that was reduced.
Ms. Speier. Reduced or just withheld until you complied
with the requirement?
General Aycock. There wasn't an initial requirement to
reply--I mean, to comply with a requirement. There was a case
that happened immediately right after the 2019 issues happened
where senior commanders decided that it was the right thing to
do on their part to withhold. And so we have had that happen to
us, yes.
Ms. Speier. And so what percentage was withheld?
General Aycock. Ma'am, I will have to get back with you on
the precise places and amounts that that was in.
Ms. Speier. All right. So you will respond to the committee
by providing us where the locations where and what the
percentage was. Is that correct?
General Aycock. Yes, ma'am.
Ms. Speier. And the amount, if you will. Okay.
[The information referred to was not available at the time
of printing.]
Ms. Speier. Ms. Tregarthen. I am sorry if I have been
slaughtering your name.
Ms. Tregarthen. Congresswoman Speier, you are pronouncing--
it is very well pronounced. Thank you.
We have had situations on different installations where our
incentive pay has been not awarded or reduced. And similar to
the previous witness, I can commit to provide you that detailed
information in writing after the hearing.
[The information referred to was not available at the time
of printing.]
Ms. Speier. And Mr. Taylor.
Mr. Taylor. Likewise, Congresswoman, we have had many
instances where the incentive fees have been reduced, not
earning the full potential. You know, one of the things that I
know that all of us in the industry are working closely with
the services on is revised metrics to make sure that they are
more appropriate for, you know, the environment that we are in.
And I know that we and Corvias and Lendlease are in lockstep
with adopting what those revised metrics look like.
Ms. Speier. And it is my understanding that this
decisionmaking is exclusively with the commander at the
installation. Is that correct? [Inaudible] if you are trying to
negotiate the incentive.
Mr. Taylor. The incentive metrics are being negotiated at
headquarters for each of the service branches, and they look
quite similar. I will say that the installation commander has a
role in recommendations in terms of what the level of incentive
fees that ought to be received, but ultimately, you need to go
to higher headquarters for ultimate adjudication.
Ms. Speier. Is that your understanding, each of you? You
can just nod your heads. All right.
One of you had referenced having a town hall with the
officers at a particular installation which I found curious
because it would make sense to me that you should have town
halls with the residents of your various homes that you have on
the facility.
So I guess my question to each of you is will you commit to
having a town hall in the next year at each of your
installations and be present for it?
General Aycock. Ma'am, this is General Aycock. The town
halls are orchestrated by the installation and senior
commander, and we participate in those. If there was any
reference meant to officers, it meant those two are the ones
who actually run the town hall and make sure that it goes with
the right way because those are their people on there, and we
support them.
So we make sure that there is always somebody there from
our company who can answer questions and take responsibility
for anything that a resident would bring to them.
Ms. Speier. So I guess I am asking a very specific
question. Would you commit to participating in a town hall at
each of your installations?
General Aycock. So, yes, ma'am. So, yes, ma'am. We have
already committed--I am sorry.
Ms. Speier. I want you to. I am not talking about persons
under your control. I want to know if you will commit to
participating in a town hall with residents at each of your
installations.
General Aycock. If you are asking me specifically, yes,
ma'am. I will commit to attending a town hall at the
installations that we have underneath Corvias' partnership with
the military.
Ms. Speier. All right. Thank you.
Ms. Tregarthen.
Ms. Tregarthen. Congresswoman, yes. I will commit to
attending town halls at our installations. And I would note
that we do already hold regular town halls where all residents
are welcome.
I would also add that with our resident advisory boards, I
have been--as I am able to visit different installations given
COVID travel restrictions, I have actually been meeting with
our resident advisory board members as well. But I will
absolutely commit to continue doing that and to attending the
town halls.
Ms. Speier. All right, but not just with your advisory
board. I want to make sure it is open to the residents. Thank
you.
Mr. Taylor?
Mr. Taylor. As will I, ma'am. As was stated, we are already
conducting town halls typically on a quarterly basis at nearly
all of our installations, so there is a lot of dialogue. But
for me personally, I would be delighted to participate. I can
tell you that over the past year since I have been in the seat,
we certainly have had a lot of travel restrictions that have
prevented a lot of personal interaction.
Ms. Speier. All right. I have one last question, Mr.
Chairman.
The bill of rights for tenants. My understanding is that
you will be compliant with that by June or July of this year.
Is that correct? General Aycock?
General Aycock. Yes, ma'am. We are on track with all of the
Department of Defense suspenses for the final parts that are
involved with the tenant bill of rights.
Ms. Speier. So all of them.
General Aycock. Yes, ma'am.
Ms. Speier. All right. Thank you.
Ms. Tregarthen.
Ms. Tregarthen. Congresswoman, we have implemented a number
of the requirements of the tenants bill of rights, and we are
on track to have the final pieces in place before the summer
PCS [permanent change of station] season.
Ms. Speier. Including the history of previous tenants?
Ms. Tregarthen. Congresswoman, we have been providing the
7-year history of maintenance to our residents since the summer
of 2020. And we have, in fact, provided over 11,000 histories
to prospective residents, and we have only had 16 residents
choose to take a different home with us.
Ms. Speier. All right. Even at Fort Hood?
Ms. Tregarthen. Yes, ma'am.
Ms. Speier. Well, there were a lot of concerns at Fort
Hood, so I am surprised to hear that. I intend to return to
Fort Hood, so maybe we can plan a town hall that you could be
available for when I go.
All right. Mr. Taylor.
Mr. Taylor. Congresswoman, we are likewise tracking
according to OSD's stated timeline by the summer PCS season.
Ms. Speier. All right. Thank you.
I yield back.
Mr. Garamendi. Thank you, Ms. Speier.
We have two additional members still with us, Ms. Jacobs
and Mr. Johnson.
Mr. Johnson, do you have another question? If you do, you
are going to have to hit your mute button.
I will give you a chance to hit your mute button. In the
meantime, we will move on.
Mr. Johnson? Okay. Apparently no further questions. I see.
Dr. Jackson and Mrs. Bice, you are both with us. You have
come back from voting. We started a second round of questions.
Dr. Jackson? Ms. Brice?
This is one of the things about remote hearings.
Mrs. Bice. Mr. Chairman, I am happy to yield to my freshman
colleague from Texas, Dr. Jackson, if he wishes to go first in
asking additional follow-up questions.
Mr. Garamendi. That is very kind of you.
Dr. Jackson.
Mrs. Bice. I don't think Dr. Jackson can hear us, though.
Mr. Garamendi. Your turn, Mrs. Bice.
Mrs. Bice. Thank you so much.
Mr. Taylor, as you know, I represent the Oklahoma City
metro area, and Tinker Air Force Base is just outside of my
congressional district, but I did serve as an honorary
commander at Tinker Air Force Base during my time in the
Oklahoma State Senate, so I got to know the base well.
It is my understanding that you have put significant
efforts into righting this ship as far as the issues that we
have discussed tonight go, but my question is, at one point you
had occupancy rates as high as 95 percent, and they have
fallen--and that was in 2019, but they have fallen to as low as
70 percent.
What are you doing to address this issue and build
confidence in our service members so that they can count on
your organization and the others on the call that they are
going to receive quality housing from your entities.
Mr. Taylor. Yes, ma'am. A great question. You know, if you
look at what the historical occupancy had been at Tinker prior
to those having a lot of systemic issues with broken water
lines that led to a lot of the environmental concerns that
received a lot of attention, we have remediated those issues.
I can tell you that we are slowly building back the trust
of Tinker residents. We are working in lockstep with the wing
commander and his staff. We have done a lot to have really kind
of turn the corner there.
I can tell you that we are somewhat the victim of a lack of
a PCS season over this past year because of the global
pandemic, but we have been slowly growing occupancy. All
indications are from Air Force leadership that we are going to
see a really robust PCS season.
And so I think all of the controls that we have put in
place, the differences in the way that we are managing the
installation housing, like I said, in close coordination with
our military housing partner I think is putting us in a much
better position.
We track really closely what resident satisfaction rates
look like, both on move in and on work order performance. And
we track it through, you know, a unique tool called Power BI
that gives us an instantaneous look at how--you know, whether
or not those scores are trending in the right direction or not.
Tinker Air Force Base is among--on both of those accounts
among the highest in our entire inventory which I think has
been a significant sea change in terms of where we were 2 years
ago versus today.
Mrs. Bice. Mr. Taylor, let me interject here for just a
moment, though. You mentioned earlier this particular platform
that you are utilizing to text and get, you know, feedback
information from the residents. And while I think that is
incredibly important, I get the impression that it is either a
yes or no answer.
And if it is a yes answer, you are giving yourself a five
star. There is no yes, but this is still happening, or yes, but
I still have additional concerns.
So I want to be clear. Having a background in marketing and
data that we are looking at all the data correctly to ensure
that every issue for these residents is being addressed.
Mr. Taylor. Right. And, yeah, maybe I misspoke, but those
text messages that we are sending is just validation for the
residents that don't complete a resident satisfaction survey
through SatisFacts. So the raw data is the third party survey
that gets sent to the residents.
So we are not taking any credit for, you know, those yes
answers being a five. That is only affirmation for us that the
resident is satisfied whether or not they chose to fill out
that SatisFacts survey.
Mrs. Bice. Great.
Mr. Garamendi. Mrs. Bice, we are running out of time. We
are going to lose----
Ms. Bice [interrupting]. Thank you, Mr. Chairman. I yield
back.
Mr. Garamendi. Thank you so very much for your question.
Ms. Speier, you had one more question.
Ms. Speier. Actually, it is just a clarification. I wanted
to make sure that you are going to be complying with the tenant
bill of rights for all your existing contracts in addition to
any new contracts.
Ms. Tregarthen says yes.
Mr. Taylor.
Mr. Taylor. Yes.
Ms. Speier. General Aycock.
General Aycock. Yes.
Ms. Speier. All right. Thank you. I yield back.
Mr. Garamendi. A little bit of house cleaning, but first, a
question. All right. I want to make sure that the base
commanders are held responsible for the well-being of all of
the personnel on their base. I don't know any other way to
enforce the bill of rights and to hold the base commanders
responsible.
So as we look at this coming NDAA, I will be looking at how
that might be accomplished. If a base commander wants his next
assignment, he better be sure that the base housing is not an
issue in his record. And that is based upon General Aycock's
response to my question that the base commander is responsible
for the well-being of all of the personnel on his base or her
base, so we will be looking at that.
I want to make sure that the information that we received
from the prior sessions with the advocates becomes part of our
record. Ms. Speier and I asked for specific information from
those advocates. When that is received, I would like that, with
unanimous consent, to become part of the record. Without
objection, that will be ordered.
[The information referred to was not available at the time
of printing.]
Mr. Garamendi. Also, written statements from the advocacy
groups to be added to the record. Without objection, so
ordered.
[The information referred to was not available at the time
of printing.]
Mr. Garamendi. I believe we have run through this. I have
committed 2 years ago to stay with this. And I suspect that
means as long as I am here and as long as there is a Readiness
Committee and a Personnel Committee, we will be at this.
So we will be doing periodic hearings and briefings and
questions. And we have already committed--Ms. Speier has
committed to go back to Fort Hood. Maybe she will invite me to
go with her. And we are going to traipse on down to Fort
Belvoir and see if Clark has an explanation for the problems
there as well as why they decided to disrespect this
committee--excuse me--disrespect these two committees.
So with that, I want to thank our witnesses, Mr. Aycock,
Ms. Tregarthen, and Mr. Taylor. Thank you so very much for
participating. This committee is adjourned.
[Whereupon, at 6:29 p.m., the subcommittee was adjourned.]
=======================================================================
A P P E N D I X
March 10, 2021
=======================================================================
PREPARED STATEMENTS SUBMITTED FOR THE RECORD
March 10, 2021
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
=======================================================================
QUESTIONS SUBMITTED BY MEMBERS POST HEARING
March 10, 2021
=======================================================================
QUESTIONS SUBMITTED BY MR. GARAMENDI
Mr. Garamendi. What do you need from the Department of Defense to
implement the window fall retrofit requirement contained in the FY20
NDAA?
General Aycock. The 2020 NDAA required DOD to ensure that new
construction homes and homes subject to substantial renovation be fit
with window fall protection devices. The 2020 NDAA also authorized the
DOD to implement a grant program to support retrofitting existing homes
with these devices. We continue to install these devices on new and
substantially renovated homes and look forward to retrofitting existing
homes once DOD makes funding available to do so via an authorized grant
program.
Mr. Garamendi. How are you reconciling auditing the maintenance
work order system to ensure that work orders are closed out only when
work has been done well? What are your accountability measures?
General Aycock. Corvias maintains a work order policy that assigns
responsibility to a Service Center Coordinator (SCC) to properly enter
each work order into the Property Management Software (``PM Software'')
database and assign a priority to the work order based on the work that
needs to be performed. The priorities are Emergency, Urgent, and
Routine. The information contained on the work order includes start and
stop times and begins when the technician arrives at the home.
Following the completion of the work order, the SCC ensures that
there are sufficient closing notes and all appropriate information has
been entered on the work order. The technician who completed the work
enters notes as well.
We are upgrading our property management software. Those locations
where it has been implemented, the technician utilizes a mobile
application to upload photographs to accompany the work order. All work
orders completed during any given day are required to be closed out in
the PM Software by the end of each day. All emergency work orders are
followed up with a call to the resident to verify the work was done
appropriately and discuss next steps, if applicable.
The military housing office (MHO) also follows up on all emergency
work orders to gauge resident satisfaction. A percentage of the urgent
and routine work orders are also selected for follow-up, including a
call to the resident to validate the work was completed correctly. A
survey is sent to every resident following the completion of a work
order to measure resident satisfaction. These results are tracked
carefully and reviewed weekly and monthly.
Any resident that submits a survey that falls below the benchmark
requirements is contacted (if they indicate they want to be contacted)
to discuss what caused the dissatisfaction, and this may trigger
another work order to be opened to complete the work satisfactorily. As
we continue to upgrade our PM Software, we are finding new ways to
reach out to residents to ensure that work has been completed
consistent with our standards and meets our residents' expectations.
Mr. Garamendi. What quality assurance measures do have you in place
at installations for maintenance staff, customer service, and property
management staff? How do you know your headquarters policies are being
carried out?
General Aycock. All Corvias employees are required to attend
specific training on customer service and developing the skills
necessary to better serve our customers. Maintenance technicians'
skills are assessed, and the technicians are rated based on their
skills as either a level I, II, or III Technician (level III being the
highest rating). All work is intended to be assigned to the level of
technician required to complete the work satisfactorily the first time.
Corvias has consistently scored Superior to Excellent on SatisFacts
surveys. Employees that perform well are acknowledged for their
excellent customer service and those that fall short are coached to
perform better. When coaching is not successful, we work to help those
technicians find opportunities elsewhere.
Another source of measuring the satisfaction of our residents is
via the CEL Survey that DOD issues directly to the resident. There are
three Satisfaction Indexes that serve as an immediate indicator of how
well the installation and property manager are performing. Corvias has
consistently performed well on the Service Satisfaction Index. Policies
are consistently reviewed and updated.
Over the last year, we have rewritten policies to encompass various
new initiatives aimed at implementing the provisions of the FY2020
NDAA, including the tenant bill of rights. When we review and update
our Standard Operating Procedures (SOPs), new training is rolled out
via our online training platform (Corvias Classroom) to ensure that all
employees implement the latest standards, and we maintain a record that
employees have taken this required training.
Our leaders at each installation reinforce training through regular
hands-on application, toolbox talks, and other opportunities to
communicate one-on-one with our employees. In addition to these
initiatives, Corvias has dedicated resources to focus on the `resident
experience'. The resident experience has been mapped out to identify
each opportunity when a property management team member may interact
with a resident. This approach is designed to ensure that we are
working to improve residents' experience throughout their tenancy,
rather than just during the move-in and move-out process.
Quarterly property reviews are held with our Asset Management and
Senior Property Management leadership to assess adherence to our
policies and the satisfaction of our residents.
Mr. Garamendi. At the hearing, you stated that state law applies to
privatized military housing. However, we have heard from tenants that
they are often told that state law does not apply because of the
federal enclave doctrine. Can you explain when state law applies and
when it does not?
General Aycock. The federal enclave doctrine is constitutionally
mandated and applies to all federal enclaves, including lands on which
many MHPI projects are located. It is not relinquished when the federal
government partners with private parties to provide military housing.
Nor can it be waived by the private MHPI partner.
Simply put, and explained in further legal detail below, any state
law enacted after the land was ceded to the federal government has no
legal force or effect in the federal enclave. Our Residential Occupancy
Agreements (``ROA'') with tenants generally state that the ROA will be
governed by the laws of the state where the home is located to the
maximum extent that the state law applies to the premises, and we abide
by those terms.
Generally, this means that a claim based on breach of the ROA will
be interpreted under state law. On the other hand, a claim based on a
particular state statute, such as a specific state consumer law, may
not be applicable if the state law was enacted after the land on which
the home is located became a federal enclave.
The federal enclave clause of the United States Constitution,
Article I, Sec. 8, Clause 17, provides that Congress shall have the
power ``To exercise exclusive legislation in all cases whatsoever, over
such district (not exceeding ten miles square) as may, by Cession of
particular States, and the acceptance of Congress, become the seat of
the government of the United States, and to exercise like authority
over all places purchased by the consent of the legislature of the
State in which the same shall be, for the erection of forts, magazines,
arsenals, dock-yards, and other needful buildings[.]'' U.S. Const., art
1, Sec. 8, cl. 17. MHPI projects are often located on federal enclaves.
When ``the United States acquires with the `consent' of the state
legislature land within the borders of that State . . . the
jurisdiction of the Federal Government becomes `exclusive.''' Paul v.
U.S., 371 U.S. 245, 264 (1963). ``This exclusive jurisdiction is
`legislative,' meaning the laws and statutes applied to these locations
must be supplied by the federal government, not the states.'' Allison
v. Boeing Laser Tech. Serv., 689 F.3d 1234, 1236 (10th Cir. 2012)
(quoting Pac. Coast Dairy v. Dep't of Ag. of Cal., 318 U.S. 285, 294
(1943)). Under the federal enclave doctrine, any state statute adopted
after the transfer of sovereignty is without force in the enclave. Pac.
Coast Dairy, 318 U.S at 294 (``It follows that contracts to sell and
sales consummated within the enclave cannot be regulated by the
California law.''); Paul, 371 U.S. at 268 (``only state law existing at
the time of the acquisition remains enforceable, not subsequent
laws''). The federal government does not relinquish exclusive
jurisdiction by partnering with private parties to provide military
housing. Atl. Marine Corps Cmtys., LLC v. Onslow Cty., N. Carolina, 497
F. Supp. 2d 743, 758 (E.D.N.C. 2007).
Mr. Garamendi. What do you need from the Department of Defense to
implement the window fall retrofit requirement contained in the FY20
NDAA?
Ms. Tregarthen. Lendlease does not need anything from the
Department of Defense (DOD) at this time. Before Evan's Law was passed,
Lendlease had collaborated with industry experts to develop a ``safety
strong screen'' that meets the requirements in the FY20 NDAA and still
allows egress in a fire emergency. Since then, we have been
retrofitting second story windows in homes across our portfolio.
Mr. Garamendi. How are you reconciling auditing the maintenance
work order system to ensure that work orders are closed out only when
work has been done well? What are your accountability measures?
Ms. Tregarthen. Lendlease has invested in 360-degree touchpoints
for resident maintenance service requests to ensure our residents
receive timely updates with useful information and are afforded
multiple opportunities throughout the experience to provide feedback,
ask questions or identify issues or challenges before a service order
is closed out. All residents have access to our quality surveys through
SatisFacts.
Each time a service order or other service is delivered to our
residents, they can utilize the system to inform us how satisfied they
were with the work on a scale of 1-5 by simply using the star ratings.
Any surveys less than 3.5 stars are proactively responded to by our
property management team to assess how we can resolve any outstanding
issues and better serve our residents. The below graphics represent the
processes we implement across our portfolio to ensure quality
maintenance work:
Mr. Garamendi. What quality assurance measures do have you in place
at installations for maintenance staff, customer service, and property
management staff? How do you know your headquarters policies are being
carried out?
Ms. Tregarthen. Lendlease has significantly enhanced and modernized
our customer service. We hired new staff, engaged new suppliers and
subcontractors, and instituted new, mandatory training for all
employees. We have added new reviews and tools for use by our
leadership teams to ensure internal policies and procedures are carried
out at each installation. This includes a new Business Intelligence
(BI) Dashboard reported to senior Lendlease executives on a monthly
basis. This provides transparency and visibility to the most senior
levels of the organization around work order response and completion
times and resident satisfaction. We have also strengthened reporting by
developing exception reporting utilizing the BI Dashboard.
Mr. Garamendi. At the hearing, you stated that state law applies to
privatized military housing. However, we have heard from tenants that
they are often told that state law does not apply because of the
federal enclave doctrine. Can you explain when state law applies and
when it does not?
Ms. Tregarthen. Whether state law applies to a particular MHPI
development depends on a number of factors, including, but not limited
to, when the area became a federal enclave, whether the law existed at
the time the area became a federal enclave, whether the pre-existing
state law is inconsistent with current federal law, and whether any
exceptions to the federal enclave doctrine apply.
The Constitution grants Congress exclusive legislative jurisdiction
over federal enclaves, like certain private military housing
developments. U.S. Const. art. I, Sec. 8, cl. 17. ``[T]he grant of
exclusive legislative power to Congress over enclaves . . . bars state
regulation without specific congressional action.'' Paul v. United
States, 371 U.S. 245, 263 (1963) (internal quotation marks and citation
omitted). However, ``in the absence of applicable federal legislation
displacing state law, those state laws that existed at the time that
the enclave was ceded to the federal government remain in force.''
Allison v. Boeing Laser Tech. Servs., 689 F.3d 1234, 1237 (10th Cir.
2012) (emphasis added). Put differently, generally state laws that were
in place at the time the area became a federal enclave continue to
apply unless they are inconsistent with applicable federal laws, while
``state law that is adopted after the creation of the enclave generally
does not apply on the enclave.'' Id. at 1235. There are three
established exceptions to the federal enclave doctrine: ``where
Congress has, by statute, provided a different rule; 2) where the state
explicitly retained the right to legislate over specific matters at the
time of cession; and 3) where minor regulatory changes modify laws
existing at the time of cession.'' Id. at 1237.
Thus, even where the federal enclave doctrine would ordinarily bar
the application of a particular state law, that law may nonetheless
apply if it fits within one of the three exceptions. Another potential
exception to the doctrine is where a contract contains a choice-of-law
provision specifying that a certain state's laws apply. In that case,
whether state law applies depends on whether the choice-of-law
provision is applicable and enforceable. The enforceability inquiry,
moreover, can turn on whether the provision is governed by currently
existing state law or state law as it existed at the time the area
became a federal enclave. See JAAAT Tech. Servs., LLC v. Tetra Tech
Tesoro, 2017 WL 4003026, at *6-7 (E.D. Va. Sept. 11, 2017). In sum, a
variety of factors impact if and when state law applies to privatized
military housing.
Mr. Garamendi. What do you need from the Department of Defense to
implement the window fall retrofit requirement contained in the FY20
NDAA?
Mr. Taylor. Project companies, like BBC, are currently executing
the window fall retrofits during all major renovation and new
construction projects, using project reinvestment account funds.
Current financial projections, however, indicate these accounts will
not have the funds necessary to support major renovations or demolition
and replacement of all remaining non-compliant homes prior to the end
of the project lease term. Grant money, as permitted in the NDAA
provision, is an option that would enable the project companies to
expedite the timeline on retrofits.
Mr. Garamendi. How are you reconciling auditing the maintenance
work order system to ensure that work orders are closed out only when
work has been done well? What are your accountability measures?
Mr. Taylor. In addition, an online survey from a third-party survey
company is issued after every new resident move-in and completed/closed
work order, asking the resident to rate their experience and level of
satisfaction. These survey responses are received in real time by both
our senior leadership, local property team and the Army/Navy Air/Force
housing office. Our team follows-up directly with any resident that
rates their experience at 3.50 or lower (5.00 is the highest rating) to
understand where we fell short and how we can correct or improve.
Our Assurance team reviews work order information entered in our
maintenance system and reviews to ensure accuracy with the site teams
on a weekly basis. We created an Assurance team in 2020 to enhance our
internal controls around work order and incentive fee compliance. This
team consists of members of our corporate-level staff, as well as
regional personnel, who oversee compliance reviews at each of our
military communities. Our Assurance and Business Support teams meet
monthly to review work order management compliance.
In addition, our Assurance team performs an annual compliance
review of the property management system. Where an instance of non-
compliance with policy or procedure is identified, it is reported to
senior leadership and an assessment is made as to the appropriate
response in terms of training or potentially formal disciplinary action
against the employee(s) where warranted.
To ensure greater transparency in the work order management
process, residents receive an email for each change in work order
status and they have the ability to view (via online portal or mobile
app) all work order information in our system including before/after
photos of the repair. Before a work order is closed in our system, the
resident is contacted to confirm the work has been completed to their
satisfaction and all aspects of the repair are working properly.
Mr. Garamendi. What quality assurance measures do have you in place
at installations for maintenance staff, customer service, and property
management staff? How do you know your headquarters policies are being
carried out?
Mr. Taylor. The Assurance team regularly analyzes data from our
maintenance system and reviews it with our maintenance teams at the
properties. The Assurance team also reviews employee compliance against
company policies and reports their findings to senior leadership for
corrective action as needed. Our Assurance team also performs on-site
inspections at the properties on an annual basis to further review
compliance and provide coaching and mentoring to the maintenance team.
Reports are compiled with their findings and communicated to the
management team.
Any corrective actions are completed and monitored for future
compliance. Monthly training is conducted with all property staff as
part of an annual training plan to ensure continuous improvement of
both their technical and customer service knowledge and skills, as well
as compliance with company policies and procedures including our Code
of Conduct.
Mr. Garamendi. At the hearing, you stated that state law applies to
privatized military housing. However, we have heard from tenants that
they are often told that state law does not apply because of the
federal enclave doctrine. Can you explain when state law applies and
when it does not?
Mr. Taylor. Whether state or local landlord tenant law legally
applies to housing at any of our project locations is dependent upon
the type of jurisdiction of the lands upon which the housing/
improvements are located. For example, some of our project locations
are located on lands that maintain federal exclusive jurisdiction
(i.e., federal enclave) where state and local law would legally not
apply; some of our project locations are located on lands that maintain
concurrent jurisdiction where only limited state and local laws apply--
typically the right to service of process and certain criminal or tax
related laws; and some of our project locations (especially those which
sit ``outside the gate'' or off the installation grounds) are located
on lands that are proprietary jurisdiction where all state and local
laws should apply subject only to federal preemption. Under the new
Universal Lease, we expect that, in alignment with NDAA requirements,
the lease agreements with tenants will require the landlord to follow
state landlord/tenant laws on a contractual basis regardless of the
jurisdiction of the lands where the housing is located.
Mr. Garamendi. What do you need from the Department of Defense to
implement the window fall retrofit requirement contained in the FY20
NDAA?
Mr. Cowley. 10 USC 2879(a), as amended by the FY20 NDAA, applies to
new construction housing units or whole-house renovations with
contracts for construction of the housing units entered after October
1, 2019. While this requirement will increase the cost of these housing
units, the expected overall cost impact is relatively minimal on a per-
home basis and can be addressed if MHPI projects receive the entire 5%
payment authorized by Section 606 of the FY19 NDAA.
Of greater concern is any requirement to replace or retrofit
windows in homes not subject to Section 2879(a), which would place an
undue financial burden on MHPI projects given the number of homes in
the portfolios and the potentially significant cost of retrofitting or
replacing existing windows. MHPI projects would require government
funding to replace or retrofit windows in homes not subject to Section
2879(a).
Funding to inventory and replace or retrofit existing windows would
need to be provided by grants that the military departments are
authorized to implement and fund under 10 USC 2879(b)(2) and (3).
Optionally, Congress could provide specific statutory authority and
potentially direct DOD to use appropriated funds to make improvements
to MHPI housing units for window fall prevention.
[Note: Mr. Cowley is a representative of Clark Realty Capital,
which declined to testify at this hearing but replied to questions sent
by Congress.]
Mr. Garamendi. How are you reconciling auditing the maintenance
work order system to ensure that work orders are closed out only when
work has been done well? What are your accountability measures?
Mr. Cowley. At family housing projects, the property manager and
government housing office work hand in hand to facilitate the proper
handling, close out, and QA/QC of resident work orders. Generally, upon
completion of the work, the Maintenance Supervisor or Customer Service
Representative reviews work order tickets to ensure they are only
closed out when work is done well. Closed work orders are reviewed by
more senior members of the property management staff, which typically
includes the Facilities Director and/or the Regional Vice President of
Facilities, to spot check, review QA/QC notes, and audit the completion
processes used by technicians.
In addition to these internal procedures, the projects proactively
solicit feedback directly from residents. For example, if the resident
is home at time of work order completion, the Service Technician will
ask the resident to sign the work order to confirm completion and
satisfaction with the work performed, subject to COVID-19 protocols.
Additionally, some projects have instituted a ``warm call'' practice by
which the property manager calls residents once their work order is
complete to verify the quality and completion.
Finally, an automated work order satisfaction survey is sent to
residents within 24 hours of a work order being closed. The property
manager reaches out to residents who provided negative feedback to
investigate the issue with the goal of arriving at a positive
resolution. The property manager, owner, and government housing office
have full access to the survey software system, including the results
and follow-up notes. Concurrently, the government housing office
performs its own verification and QA/QC measures.
To facilitate collaboration, transparency, and accountability, the
government housing office has been granted full access to the property
manager's work order processing software. They use this information to
perform follow-up phone calls to residents on emergency and urgent work
orders, as well as a sampling of routine work orders. Accountability
measures also extend to unit turns: after the property manager's final
inspection, the military's QA/QC team conducts a full assessment of the
home and approves it prior to occupancy by a new family.
Specifically at Pacific Beacon, the Maintenance Supervisor and
Facilities Director routinely audit the maintenance work order system
to ensure work orders are only closed out when work is done well. They
monitor service request activity daily, particularly with respect to
emergency and urgent requests, and they review closed work orders to
verify the work has been completed properly. Completed work orders are
also reviewed regularly by the Navy inspectors, who have full access to
the work order software system, as well as the Community Director.
Accountability measures are further supported by automated
satisfaction surveys sent to residents within 24 hours of work order
completion. The Facility Director follows up directly with residents on
any issues identified in the survey until the issue has been resolved.
Mr. Garamendi. What quality assurance measures do have you in place
at installations for maintenance staff, customer service, and property
management staff? How do you know your headquarters policies are being
carried out?
Mr. Cowley. Quality assurance measures for maintenance, customer
service, and other property management staff begin with the property
manager's recruiting and interviewing processes. While relevant
experience and technical proficiency are necessary and highly valued,
just as important are candidates' ability to demonstrate empathy,
integrity, and teamwork.
Once selected for hire, property management employees typically
undergo a month-long onboarding process and initial training period.
Opportunities for ongoing and continuing education are provided
throughout the year: depending on the staff member's particular role
and the requirements of the specific project, training may include
topics such as fair housing; identification and proper handling of
mold, asbestos, and lead; universal EPA HVAC certification; fire code
essentials; and active shooter response plans, among others.
In addition, all employees along with their respective government
housing office staff members are invited to attend customer experience
workshops that reinforce the values of the community and the role that
each team member plays. In addition to the technical and cultural
training in place, the property manager has developed processes that
allow for ongoing verification by senior management of their
established policies and standards.
This starts with daily monitoring of the property management
software system, reports, and analytics in search of any leading
indicators of quality assurance issues. Any areas of concern,
discrepancies, or negative trends can be identified remotely and in
real time. In-person quality assurance measures on behalf of the
property manager include weekly staff meetings and weekly checkpoints
between on-site teams and Regional Vice Presidents and/or Facilities
Directors, as well as quarterly site visits and property walks.
Any areas in which the physical condition of the property or
operational standards are found to be deficient are addressed on the
spot. Ultimately, should any of these quality assurance and
accountability measures not meet the resident's standards, multiple
feedback loops are in place including resident satisfaction surveys,
24-hour government-managed complaint hotlines at Army and Air Force
locations, and support and oversight by the government housing office
staff.
Mr. Garamendi. Can you explain your understanding of when state law
applies to military family housing and when the federal enclave
doctrine precludes its application?
Mr. Cowley. Whether or not Federal Enclave Jurisdiction exists for
a specific claim is a fact intensive question that turns on the nature
of the claim asserted, as well as the historic details regarding the
original grant of the land to the federal government. See, e.g., Swords
to Plowshares v. Kemp, 423 F. Supp. 2d 1031, 1034 (N.D. Cal. 2005).
However, as a practical matter, landlord-tenant matters are generally
governed by state law, and our projects are working on implementing the
Universal Lease, which specifies that local state law governs each of
our tenant leases.
Mr. Garamendi. In your letter declining to participate in the
hearing, you eluded to your unique structure and how it would preclude
you for being able to adequately prepare for the hearing. Since
multiple LLCs covering various projects with services executed at
different times with different structures is common place amongst
privatized military family housing partners, please further explain why
your structure's complexity was sufficiently different from the norm
that it made it impossible to participate?
Mr. Cowley. We are committed to supporting the Subcommittees'
oversight responsibilities, and we look forward to your visit to Fort
Belvoir on 11 May. Our goal was to obtain and provide accurate,
complete, and timely information to the Subcommittees in the most
efficient, effective, and transparent way possible. For our military
family housing projects, we rely on a military-approved third-party
property manager whose responsibilities include managing resident
communications, processing work orders, establishing operational
procedures, and enforcing quality control measures, among other on-site
activities.
This lack of vertical integration with property management and a
decentralized management structure that emphasizes teamwork and
decision-making at the project levels, make it difficult for any single
point of contact to answer specific questions completely and
accurately. We appreciate the opportunity to respond to questions in
this manner.
Mr. Garamendi. Clark Realty Capital and its subsidiaries seems to
be lagging in implementation of the tenant's bill of rights when
compared to other housing partners. Why have you been unable to
implement these reforms in a timely fashion?
Mr. Cowley. We support the military's commitment to implementing
the TBOR and have implemented the first 14 TBOR items at the projects.
For the remaining 4 TBOR items, each project has recommended an
actionable implementation plan to its DOD partner(s); however,
implementation may require approval of outside parties including
project lenders.
Mr. Garamendi. You indicated in your letter that you make extensive
use of third-party property management companies. Have you or any of
your subsidiaries ever refused when one of these companies has
approached you about providing a remedy or benefit to a tenant either
in the form of a right delineated in tenants bill of rights, or
monetary compensation?
Mr. Cowley. As discussed in the previous question, the projects
have made the first 14 TBOR items available to residents and are
working with the project stakeholders on an implementation plan for the
remaining 4 items. In the interim, the projects have operated in
accordance with obligations to which they are bound under current
contracts. To the extent that a tenant requests monetary compensation,
the projects generally follow a process that includes the participation
of the resident, property manager, 3rd party experts, owner, and
insurance companies, if necessary.
______
QUESTIONS SUBMITTED BY MS. SPEIER
Ms. Speier. What is your company's total revenue from MHPI for the
most recent year?
General Aycock. The MHPI program provides for the formation of
public-private partnerships between housing providers and the Services,
which operate differently from typical businesses to the extent that
revenue is only spent pursuant to budgets agreed to by the Services. As
a result, how revenue and profit are considered is also different. Each
of the individual partnerships generate housing rental revenue, usually
from Servicemember's Basic Allowance for Housing (BAH), but also from
other eligible tenant rents.
In 2020, the partnerships at each of the bases Corvias serves
collected approximately $399 million in aggregate housing revenue
(``Project Funds''). These funds are attributable to the public-private
partnerships; the funds do not go to, and are not directly controlled
by, Corvias Military Living. Corvias Military Living, LLC is the parent
company of several entities that earn revenues from their business
activities in support of the MHPI Program.
In 2020, the total revenue of those entities was approximately $45
million, encompassing property management, development, and
construction work. Of this amount, Corvias earned just over $19 million
in property management fee revenue, which is charged against annual
project revenues. The remainder of this revenue is attributable to
Corvias's construction and development groups work on newbuild
construction and renovation projects, including initial and out-year
development, as well as work conducted via the additional $325 million
in new private sector investment in our Army projects announced in
2019. Total construction and development revenue was roughly $25
million in 2020.
Typically, construction and development projects are paid using
investment or reserve dollars, rather than current-year revenue. The
vast majority of Project Funds are used to: (a) pay the project's
lenders, (b) pay project operating expenses, and (c) fund various
reinvestment reserve accounts controlled by the military service
branches in order to sustain the projects over the entire term of the
public-private partnership. A small portion of reinvestment funds may
eventually be used to pay the various Corvias entities that oversee
construction and development work, if earned in connection with the
additional services those entities provide to the projects over time.
Ms. Speier. What percentage of your revenues from your
participation in MHPI are ascribed to overhead, both at the corporate
and installation levels?
General Aycock. The vast majority of rental revenue at the MHPI
projects we manage is paid in direct expenses associated with resident
services, such as leasing and maintenance, debt service, utilities,
property management fees, and other operating costs required to ensure
the ongoing longevity of the projects.
In addition, each project also incurs direct construction costs
related to construction and renovation of new and existing homes--which
are typically paid from project reserves rather than current-year
revenues. The MHPI program is a public-private partnership. We are not
aware of a common definition of ``overhead'' within the context of
public-private partnership management of housing and, many different
companies may account for costs accounting departments and business
apply the term overhead differently, consistent with generally accepted
accounting principles.
But, for the purposes of our response, we assume that you are
referring to indirect, but necessary, costs associated with offering
these homes for rent, which are allocated to the project company at the
installation level pursuant to property management or development
agreements. Using this definition, overhead costs consist of corporate
accounting, communications, financial reporting, human resources
(except staff recruiting), legal support, information technology, risk
management (except insurance premiums), and various corporate executive
costs. (Again, ``overhead'' does not refer to direct operating costs
like housing maintenance and repair.)
Typically, these overhead costs are allocated across our portfolio
of projects based on the number of homes and associated staffing level
at each installation, which allows us to ensure the most efficient use
of available resources possible.
Overall, in 2020 (the most recent financial year for which data is
available), of the $399 million in overall revenue ascribable to the 13
installations of which a subsidiary of Corvias Military Living, LLC is
the managing member, roughly 2% was ascribable to overhead as described
above. Once again, it is important to note that the $399 million in
overall revenue referenced above does not go to, and is not directly
controlled by, Corvias Military Living. We have provided additional
detail for the indirect costs for each project below.
Ms. Speier. How many employees does your company have working for
your MHPI projects? How many for each garrison or installation where
your company operates housing?
General Aycock. As of mid-March 2021, seven hundred and sixty (760)
of our company's employees serve our military family residents at
thirteen installations across the Country. This represents roughly
ninety percent (90%) of all Corvias Group employees. Of these seven
hundred and sixty individuals, six hundred and forty-six (646)
individuals are employed at a single installation, while the remainder
work in supporting functions across our installations, including
accounting, environmental, health, and safety (EHS), information
technology, and other activities that can be efficiently provided to
more than one installation.
These supporting personnel often work from a specific installation
close to their home, but also may work remotely (particularly during
the COVID-19 pandemic). The number of employees assigned directly to
each installation (including resident support staff, maintenance team
members, and construction oversight when applicable) is included in the
following chart:
[The chart referred to was not available at the time of printing.]
Ms. Speier. What is the total amount of reduction for incentive
fees at each installation/garrison for your company over the last 5
years? Please indicate if these incentive-fee reductions were merely
deferred and paid later, or if it was a permanent and final cut to what
the company would otherwise have been paid in incentive fees.
General Aycock. The following chart illustrates the total amounts
less than the potentially available incentive fees that Corvias earned
at each of our projects since 2016. Please note that our incentives are
awarded on a per-project basis. Therefore, for AFCG there is a single
incentive fee, which covers our management of housing at Edwards AFB,
Eglin AFB, Eielson AFB, Hurlburt Field, McConnell AFB, and Seymour
Johnson. To the extent possible, this chart accounts for any deferred/
late payments as earned with respect to the year in which they were
potentially available (rather than the year in which they were paid
with respect to any deferred incentive payments).
[The chart referred to was not available at the time of printing.]
Ms. Speier. How many 7-year histories of properties has your
company provided to tenants, and how many tenants have refused a
property after reviewing the 7-year history?
General Aycock. As of mid-March, we had provided roughly 2,100
prospective residents with a seven-year maintenance history. Of those,
five residents (0.25%) declined to accept the home based on the
maintenance history.
Ms. Speier. When you provide a 7-year history, is it presented in
plain English so that they tenant can understand it?
General Aycock. Yes, the 7-year maintenance history is provided
using a standardized cover page developed by the Services and approved
by DOD. We provide an additional cover page related to construction and
renovation work in the prospective resident's neighborhood and provide
additional detail on any work conducted at the resident's request.
Ms. Speier. What percentage of your company's overall MHPI housing
units are currently unoccupied because of maintenance or habitability
reasons?
General Aycock. As of April 1st, approximately 974 of the homes we
manage are considered off-line. This represents about 3.8% of the total
number of homes in our portfolio. Of these off-line homes, 600 are
currently scheduled to come back on-line either through scheduled
renovations or other project work. An additional 140 homes are off-line
and scheduled for demolition, and 234 are awaiting a final development
decision regarding whether they will be demolished or renovated.
Ms. Speier. In the last 3 years, how many tenants have you had to
relocate prior to their scheduled lease termination due to maintenance
or habitability reasons?
General Aycock. Our property management software system does not
directly track the number of residents who have terminated their lease
specifically due to maintenance or habitability concerns. However, for
2020 we are able to identify that across our portfolio, 30 families
moved out of their homes early and indicated that they were doing so
because they were unhappy with the community. An additional 342
families moving out early indicated that they were doing so for a
personal reason.
Typically in our experience that means they are not being stationed
elsewhere but have decided to move off-post into a new home that they
have leased or purchased. This represents a very small percentage
(1.4%) of our entire portfolio of roughly 27,000 units.
Ms. Speier. All of the witnesses present testified that their
companies believe MHPI leases and housing are subject to state and
local laws related to housing and leases. How does the federal enclave
doctrine apply to your company's MHPI projects, and in what
circumstances, if any, does the federal enclave doctrine preempt state
laws that would otherwise apply to your company's MHPI projects?
General Aycock. The federal enclave doctrine is constitutionally
mandated and applies to all federal enclaves, including lands on which
many MHPI projects are located. It is not relinquished when the federal
government partners with private parties to provide military housing.
Nor can it be waived by the private MHPI partner.
Simply put, and explained in further legal detail below, any state
law enacted after the land was ceded to the federal government has no
legal force or effect in the federal enclave. Our Residential Occupancy
Agreements (``ROA'') with tenants generally state that the ROA will be
governed by the laws of the state where the home is located to the
maximum extent that the state law applies to the premises and we abide
by those terms. Generally, this means that a claim based on breach of
the ROA will be interpreted under state law.
On the other hand, a claim based on a particular state statute,
such as a specific state consumer law, may not be applicable if the
state law was enacted after the land, on which the home is located,
became a federal enclave. The federal enclave clause of the United
States Constitution, Article I, Sec. 8, Clause 17, provides that
Congress shall have the power ``To exercise exclusive legislation in
all cases whatsoever, over such district (not exceeding ten miles
square) as may, by Cession of particular States, and the acceptance of
Congress, become the seat of the government of the United States, and
to exercise like authority over all places purchased by the consent of
the legislature of the State in which the same shall be, for the
erection of forts, magazines, arsenals, dock-yards, and other needful
buildings[.]'' U.S. Const., art 1, Sec. 8, cl. 17. MHPI projects are
often located on federal enclaves. When ``the United States acquires
with the `consent' of the state legislature land within the borders of
that State .1A.1A. the jurisdiction of the Federal Government becomes
`exclusive.''' Paul v. U.S., 371 U.S. 245, 264 (1963). ``This exclusive
jurisdiction is `legislative,' meaning the laws and statutes applied to
these locations must be supplied by the federal government, not the
states.'' Allison v. Boeing Laser Tech. Serv., 689 F.3d 1234, 1236
(10th Cir. 2012) (quoting Pac. Coast Dairy v. Dep't of Ag. of Cal., 318
U.S. 285, 294 (1943)). Under the federal enclave doctrine, any state
statute adopted after the transfer of sovereignty is without force in
the enclave. Pac. Coast Dairy, 318 U.S at 294 (``It follows that
contracts to sell and sales consummated within the enclave cannot be
regulated by the California law.''); Paul, 371 U.S. at 268 (``only
state law existing at the time of the acquisition remains enforceable,
not subsequent laws''). The federal government does not relinquish
exclusive jurisdiction by partnering with private parties to provide
military housing. Atl. Marine Corps Cmtys., LLC v. Onslow Cty., N.
Carolina, 497 F. Supp. 2d 743, 758 (E.D.N.C. 2007).
Ms. Speier. What is your company's total revenue from MHPI for the
most recent year?
Ms. Tregarthen. Attached are audited financials for each of our
MHPI projects for the most recent fiscal year. We draw your attention
to the Notes to the Financial Statements under ``Related-Party
Transactions'', which discloses the revenue received from each of the
underlying projects. *As these documents are not in the public domain,
we request they be treated as proprietary and confidential and not
disclosed outside the Subcommittee without Lendlease's express consent.
Ms. Speier. What percentage of your revenues from your
participation in MHPI are ascribed to overhead, both at the corporate
and installation levels?
Ms. Tregarthen. For installation level revenue and overhead, please
reference the FY20 Project Company audited financials included with
this request. For Lendlease corporate level information, please
reference the FY20 Lendlease audited financials by going to: https://
www.lendlease.com/investor-centre/.
Ms. Speier. What percentage of your revenue is ascribed to
overhead?
Ms. Tregarthen. Lendlease is a publicly listed company, and our
revenue and overhead is disclosed in our audited reports. For your
convenience, Lendlease audited financials for its most recent fiscal
year can be accessed here: https://www.lendlease.com/investor-centre/.
Ms. Speier. How many employees does your company have working for
your MHPI projects? How many for each garrison or installation where
your company operates housing?
Ms. Tregarthen. See supporting document attached.
[The document referred to was not available at the time of
printing.]
Ms. Speier. What is the total amount of reduction for incentive
fees at each installation/garrison for your company over the last 5
years? Please indicate if these incentive-fee reductions were merely
deferred and paid later, or if it was a permanent and final cut to what
the company would otherwise have been paid in incentive fees.
Ms. Tregarthen. Please see the attached document that provides
total amount of reduction in incentive fees at each installation for
the last five (5) years. *As this document is not in the public domain,
we request it be treated as proprietary and confidential and not
disclosed outside the Subcommittee without Lendlease's express consent.
Ms. Speier. How many 7-year histories of properties has your
company provided to tenants, and how many tenants have refused a
property after reviewing the 7-year history?
Ms. Tregarthen. Lendlease began distribution of the 7-year
maintenance history to all new, inbound residents in June 2020. Since
that time, approximately 14,215 7-year maintenance histories have been
provided across our portfolio. Of that number, only 24 homes were
expressly declined as a result of the 7-year maintenance histories,
with 19 of those prospective residents accepting a different home
assignment. The remaining five residents ultimately chose to live off
the installation
Ms. Speier. When you provide a 7-year history, is it presented in
plain English so that they tenant can understand it?
Ms. Tregarthen. Yes. The 7-year maintenance histories are in a
format that is easily understandable, and our teams are always
available to answer any questions or clarify any information.
Ms. Speier. What percentage of your company's overall MHPI housing
units are currently unoccupied because of maintenance or habitability
reasons?
Ms. Tregarthen. Below chart represents current portfolio vacancies
due to scheduled renovation, repair and maintenance by project:
[The chart referred to was not available at the time of printing.]
Ms. Speier. In the last 3 years, how many tenants have you had to
relocate prior to their scheduled lease termination due to maintenance
or habitability reasons?
Ms. Tregarthen. Historically we did not track this data; however,
in July 2020 we developed and implemented a resident tracker, which
allows us to track when residents move within or out of one of our
installations. In the nine (9) months from 7/1/20 thru 3/31/21, only 60
residents were offered to relocate within the project or were offered
the opportunity to break their lease without penalty due to maintenance
or environmental concerns. These 60 offers are broken out by project as
follows:
[The information referred to was not available at the time of
printing.]
Ms. Speier. All of the witnesses present testified that their
companies believe MHPI leases and housing are subject to state and
local laws related to housing and leases. How does the federal enclave
doctrine apply to your company's MHPI projects, and in what
circumstances, if any, does the federal enclave doctrine preempt state
laws that would otherwise apply to your company's MHPI projects?
Ms. Tregarthen. Typically, the federal enclave doctrine applies to
any area deemed a federal enclave. Manning v. Gold Belt Falcon, LLC,
681 F.Supp.2d 574, 576 (D.N.J. 2010) (``The Federal Enclave Doctrine
applies to land held by the federal government that was given, deeded
or ceded by the state.''). As explained in response to Question 19, and
prescribed by the Constitution, this means Congress possess exclusive
jurisdiction to legislate over that area. State law would apply if it
was in existence at the time the land became a federal enclave and is
consistent with federal law, or if an exception to the federal enclave
doctrine applies.
The circumstances concerning when a particular state law applies to
a privatized housing development are varied. Numerous factors,
including the date a particular law was enacted, the date and
conditions under which the land became a federal enclave, the current
federal regulatory scheme, and the law agreed-to by the parties, affect
whether and which state laws apply.
Ms. Speier. How many of your homes are offline at each of your
installations during a 6 month period of time and how many of your
families move before the lease is up?
Ms. Tregarthen. During the most recent six-month period (10/1/20
thru 3/31/21), the average number of off-line per month by project
were:
[The chart referred to was not available at the time of printing.]
Ms. Speier. Do each of you pay for damaged personal property when a
unit becomes uninhabitable?
Ms. Tregarthen. Yes, we pay for damaged personal property when a
unit becomes uninhabitable if the damage to personal property was
caused by our failure to maintain the home. Additionally, we regularly
reimburse families for out-of-pocket expenses and incidentals such as
providing temporary lodging, per diem, and in some cases have moved
families into different homes.
Ms. Speier. What is your company's total revenue from MHPI for the
most recent year?
Mr. Taylor. Information regarding all payments from the MHPI
projects to Balfour Beatty-related entities are included in the project
level audited financial statements for each of our MHPI projects,
copies of which are provided to each of the Service Branches and
respective lenders for the projects.
Ms. Speier. What percentage of your revenues from your
participation in MHPI are ascribed to overhead, both at the corporate
and installation levels?
Mr. Taylor. We incur corporate overhead costs that support all of
our business units, including our military housing portfolio. We do not
allocate any corporate overhead costs to the military housing projects.
For example, only the costs of employees directly associated with
specific projects are allocated to those projects; and these direct
employee costs are included in the relevant annual budgets for those
projects which are approved by the Service Branches and the lenders for
those projects.
Direct costs that relate to the operation and management of our
military housing portfolio are charged to the respective military
projects and are included in the operating costs reflected in each of
the respective projects audited financial statements. There are
instances where certain direct costs are incurred to support multiple
projects. In those instances, the costs are allocated based on the
respective projects' housing unit count receiving those respective
services.
Ms. Speier. How many employees does your company have working for
your MHPI projects? How many for each garrison or installation where
your company operates housing?
Mr. Taylor. As of the end of March, we had 1,055 employees working
at our MHPI project locations. Following is a breakdown for each
installation where we operate housing:
Altus AFB 14
Beale AFB 17
Cannon AFB 26
Carlisle Barracks 10
Cavalier AFS 2
JBWS Charleston 22
Dyess AFB 17
Ellsworth AFB 16
Fairchild AFB 22
FE Warren AFB 18
Fort Bliss 96
Fort Carson 57
Fort Detrick 10
Fort Eustis 28
Fort Gordon 25
Fort Hamilton 10
Fort Jackson 11
Fort Leonard Wood 17
Fort Stewart 51
Fort Stewart UPH 6
Fort Story 7
Grand Forks AFB 7
Hunter AAF 15
Lackland AFB 23
Luke AFB 15
Malmstrom AFB 28
Minot AFB 31
Mitchel Field Complex 7
Moody AFB 6
Mountain Home AFB 24
NAS Jacksonville 9
NAS Key West 26
NAS Meridian 5
NAS Pensacola 25
NAS Whiting Field 7
NASJRB Fort Worth 3
NAVSTA Newport 25
NCBC Gulfport 22
NS Mayport 25
NSA Lakehurst 5
NSA Panama City 4
NSA Saratoga Springs 6
NSB Kings Bay 12
NSB New London 47
NSY Portsmouth 5
NWS Earle 4
Picatinny Arsenal 5
Sheppard AFB 23
Tinker AFB 23
Travis AFB 25
Tyndall AFB 4
Vandenberg AFB 24
Walter Reed Army Medical Ctr. 6
West Point 35
White Sands Missile Range 10
Whiteman AFB 26
Regional Operating Center (AZ) 6.
Ms. Speier. What is the total amount of reduction for incentive
fees at each installation/garrison for your company over the last 5
years? Please indicate if these incentive-fee reductions were merely
deferred and paid later, or if it was a permanent and final cut to what
the company would otherwise have been paid in incentive fees.
Mr. Taylor. The terms under our property management and fee
management agreements with respect to incentive fees, as well as the
amounts earned and unpaid at the end of the reporting period, are
disclosed in the respective project audited financial statements.
Ms. Speier. How many 7-year histories of properties has your
company provided to tenants, and how many tenants have refused a
property after reviewing the 7-year history?
Mr. Taylor. We initiated a pilot program in September 2020 to
provide the 7-year maintenance history to incoming residents prior to
move-in at three locations, including Hunter Army Airfield, Moody Air
Force Base and Naval Air Station Jacksonville. Between September 14,
2020 and March 29, 2021, we had 242 families scheduled to move-in at
the three properties listed and all received the 7-year maintenance
history for their unit in advance. Of the 242 scheduled move-ins, two
families declined the units they were offered and did not ask for an
alternative unit, instead opting for other off-base housing. We do not
have any feedback whether their decision to decline housing was based
on the maintenance history provided or some other factor.
Ms. Speier. When you provide a 7-year history, is it presented in
plain English so that they tenant can understand it?
Mr. Taylor. Yes, the 7-year maintenance history on a unit is
provided in plain English that a prospective tenant can easily
understand. The information provided includes all details required by
the Department of Defense, including work order number, priority,
category/service type, description of issue/repair and completion date.
Ms. Speier. What percentage of your company's overall MHPI housing
units are currently unoccupied because of maintenance or habitability
reasons?
Mr. Taylor. As of the end of March 2021, 1.73% of our MHPI housing
units are unoccupied due to the need to perform maintenance work or
other repairs.
Ms. Speier. In the last 3 years, how many tenants have you had to
relocate prior to their scheduled lease termination due to maintenance
or habitability reasons?
Mr. Taylor. Across the more than 41,000 units in our military
housing portfolio, we have relocated 448 tenants over the past three
years (April 2018 through March 2021) prior to lease termination due to
the need to perform significant unit repairs (including for natural
disaster and storm-related damages). This number, however, does not
include events associated with Hurricane Michael impacts occurring at
Tyndall AFB in October 2018.
Ms. Speier. All of the witnesses present testified that their
companies believe MHPI leases and housing are subject to state and
local laws related to housing and leases. How does the federal enclave
doctrine apply to your company's MHPI projects, and in what
circumstances, if any, does the federal enclave doctrine preempt state
laws that would otherwise apply to your company's MHPI projects?
Mr. Taylor. See response to QFR 11 above. In addition, it is
important to note that in certain situations, the doctrine of federal
preemption may apply where an otherwise applicable state or local law
conflicts with a federal purpose. For example, where state or local law
would otherwise prohibit a landlord from giving priority to service
members and their families over other housing applicants under fair
housing laws, then such laws would be deemed preempted by the federal
purpose of the Military Housing Privatization Initiative.
Ms. Speier. Do each of you pay for damaged personal property when a
unit becomes uninhabitable?
Mr. Taylor. To the extent a resident's personal property is damaged
due to a negligent act or omission by the landlord, the resident is
compensated for such damage regardless of whether the home remains
habitable or uninhabitable.
Ms. Speier. What is your company's total revenue from MHPI for the
most recent year?
Mr. Cowley. The project companies have engaged military-approved
service providers at each installation for property and asset
management services, which bill in accordance with the agreements
established at the beginning of the projects and approved by the DOD
partners. The following are the approximate fees earned in 2020 by the
various service providers:
Third-Party Property Management*: $9,340,000
Property Management: $1,961,000
Development: $1,653,000
Construction: $574,000
Asset Management: $3,363,000
*Note: Clark Realty Capital LLC, in its role as the non-member
manager of the managing member of the project companies, does not
receive revenue. It has no direct or indirect ownership in, and
receives no financial benefit from fees paid to, the third-party
property manager.
Ms. Speier. What percentage of your revenues from your
participation in MHPI are ascribed to overhead, both at the corporate
and installation levels?
Mr. Cowley. The project service providers bill in accordance with
the applicable agreements and budgets and charge direct expenses and
fees. The construction agreements provide the general contractor an
overhead charge of 2% on total construction costs, which equaled a
total of $296,000 in 2020.
Ms. Speier. How many employees does your company have working for
your MHPI projects? How many for each garrison or installation where
your company operates housing?
Mr. Cowley. For the military family housing projects, the asset
management teams consist of approximately 16 permanent staff members at
any given time. For the unaccompanied housing project at Pacific
Beacon, the team consists of approximately 44 permanent staff members
at any given time. A breakdown of staff members by installation is
included below, as well as information on the number of staff members
for the third-party property manager.
Ms. Speier. What is the total amount of reduction for incentive
fees at each installation/garrison for your company over the last 5
years? Please indicate if these incentive-fee reductions were merely
deferred and paid later, or if it was a permanent and final cut to what
the company would otherwise have been paid in incentive fees.
Mr. Cowley. In total, the property managers have experienced a
permanent reduction of their incentive fee of approximately $6,433,000
across all projects. The breakdown below represents the unearned
property management incentive fees by installation over the past 5
years.
Belvoir: $930,000
Benning: $1,571,000
Irwin/Moffett/Parks: $764,000
Monterey: $2,862,000
Andrews/MacDill: $241,000
Pacific Beacon: $65,000*
*Note, Pacific Beacon is an award-winning community earning the
DoD's ``A+ Platinum'' designation for service excellence in 4 out of
the past 5 years of the government's annual Residential Satisfaction
Survey, administered by CEL & Associates.
Ms. Speier. How many 7-year histories of properties has your
company provided to tenants, and how many tenants have refused a
property after reviewing the 7-year history?
Mr. Cowley. The properties have not provided any 7-year histories
to residents. There are instances where the military has provided
histories directly to tenants, and the projects support these efforts.
Delivery of the 7-year histories is part of the implementation plan
proposed for the remaining 4 TBOR items.
Ms. Speier. When you provide a 7-year history, is it presented in
plain English so that they tenant can understand it?
Mr. Cowley. N/A. Please see the response above.
Ms. Speier. What percentage of your company's overall MHPI housing
units are currently unoccupied because of maintenance or habitability
reasons?
Mr. Cowley. As of 1 April 2021, approximately 0.2% of the units are
currently unoccupied due to substantial maintenance or habitability
reasons (this excludes approximately 122 historic units that are
offline for Army-approved renovations).
Ms. Speier. In the last 3 years, how many tenants have you had to
relocate prior to their scheduled lease termination due to maintenance
or habitability reasons?
Mr. Cowley. In the last three years, the property managers have
permanently relocated approximately 168 tenants to different homes
prior to their scheduled lease termination due to maintenance or
habitability reasons.
Ms. Speier. All of the witnesses present testified that their
companies believe MHPI leases and housing are subject to state and
local laws related to housing and leases. How does the federal enclave
doctrine apply to your company's MHPI projects, and in what
circumstances, if any, does the federal enclave doctrine preempt state
laws that would otherwise apply to your company's MHPI projects?
Mr. Cowley. As discussed above in the answer to question #12,
whether or not Federal Enclave Jurisdiction exists for a specific claim
is a fact-intensive question that turns on the nature of the claim
asserted, as well as the historic details regarding the original grant
of the land to the federal government. See, e.g., Swords to Plowshares
v. Kemp, 423 F. Supp. 2d 1031, 1034 (N.D. Cal. 2005). However, as a
practical matter, landlord-tenant matters are generally governed by
State law, and our projects are working on implementing the Universal
Lease, which specifies that local state law governs each of our tenant
leases.
______
QUESTIONS SUBMITTED BY MS. HOULAHAN
Ms. Houlahan. I understand that there have been allegations
regarding irregular reporting in your maintenance records and unsafe
housing conditions. What steps are you taking to strengthen your
housing maintenance system and improve transparency? How are you
working with families to rebuild trust?
General Aycock. Corvias has implemented several initiatives that
provide real time updates on work order requests and followup
mechanisms to strengthen quality control related to work order
completion and resident satisfaction. Residents can place a work order
through a mobile application or online that allows tracking from input
to completion.
When a work order is placed via phone, in person, or by another
method, a work order number is provided for resident tracking. When a
work order requires additional work after the initial visit from our
maintenance team, residents are provided a prediction on the timing for
completion, as well as frequent updates.
We are also migrating to new property management software that has
robust tracking for timeliness of completion and description of work
performed. One of these tools, which is being implemented at some of
our installations already, will send out a simple survey on the day the
work order is closed asking the residents ``Are you satisfied?'' This
allows us to solicit feedback in addition to the SatisFacts surveys the
MHPI partners conduct on work orders and move-ins.
Corvias is working closely with military housing offices and
installation leadership to rebuild trust with our residents. Our local
teams participate in Town Halls and provide several convenient methods
for residents to reach our teams for two-way dialogue on any feedback
or concerns. Depending on location and our partners programming, this
may be Resident Advisory Groups, Installation Focus Groups, or
participation with AF Resident Advocates as a means to solicit feedback
and regain trust.
Ms. Houlahan. It is my understanding that some of the ``tenants
bill of rights'' provisions are set to take effect this summer,
including tenants' access to maintenance records and the ability to
withhold rent if there is a dispute. Where are your companies in its
efforts to implement these changes?
General Aycock. Corvias has been a leader among the MHPI partners
focused on implementing the tenant bill of rights. As of June 2020 the
DOD certified that 14 of 18 rights where fully implemented. Corvias is
on track to have the remaining four rights implemented by June 2021,
these include:
Maintenance History--Corvias conducted a seven-year
maintenance history pilot program in 2020 and began rolling those
histories out to all prospective residents in December, 2020. All
prospective residents receive a maintenance history, as do current
residents who request a copy.
Common/Universal Lease--Corvias first agreed to utilize a
common lease template in November 2020 but DOD's finalization of the
template was delayed until February, 2021. Once we received that
template in February, we began state-level legal review and the
creation of community-specific addenda, as called for by the template.
We are working hard to have this rolled out by June, 2021.
Dispute Resolution--Corvias advocated for the creation of
a Service-led Dispute Resolution process and has agreed to participate
as soon as the Army and Air Force finalize their procedures to
implement the program. In the interim, we continue to work with the
Military Housing Office and/or Service legal assistance attorneys who
are assisting service members to resolve disputes that may arise
between them, as residents, and Corvias as the community's property
manager. Consistent with the 2020 NDAA, the Services review and approve
any settlement agreement between Corvias and our servicemember
residents.
Rent Segregation--Consistent with the dispute resolution
process, we have agreed to seek our lenders' consent to allow residents
to withhold their rent via a segregated account and will do so as soon
as the Services have proposed their procedures for the dispute
resolution process. We anticipate the need to revise some operating
documents to allow for this process but expect to be able to implement
this program along with the Universal Lease as long as the Services'
processes are completed.
Ms. Houlahan. I understand that there have been allegations
regarding irregular reporting in your maintenance records and unsafe
housing conditions. What steps are you taking to strengthen your
housing maintenance system and improve transparency? How are you
working with families to rebuild trust?
Ms. Tregarthen. Lendlease is an industry leader in innovating and
continually improving upon maintenance system technology. Since 2007,
Lendlease has worked with a software developer to create custom reports
to manage timeframes for servicing open orders and repeat service
orders, investing with large on-hand repair parts and managing our
inventory. Maintenance team members carry company-issued smart pads
with the ability to review the histories of the homes they repair and
to allow residents to sign-off when work is completed.
We continue to be open and transparent with our residents regarding
the conditions of our homes. As noted, the FY20 NDAA requires us to
provide prospective residents with seven years of maintenance history
on an offered home prior to lease signing--and Lendlease is the first
company to do so. The tenant bill of rights is also posted on our
project websites.
In order to build greater trust with our residents, in 2020,
Lendlease launched a new Customer Care Program based on a commitment to
five pillars: Safe and Healthy Homes, Quality and Consistent Service
Experience, Communication and Education, Organizational Culture of
Caring, and Sense of Community. Under the program, we successfully
identified and are implementing new ways of listening to and engaging
with our 123,000 residents across more than 40,000 homes. In addition
to hiring seasoned customer care professionals to guide our program at
the highest levels of the organization, we also recently appointed
local customer care resources for each of our project sites. Our
enhanced customer care approach includes several new solutions:
Resident Advisory Boards--At the center of our resident
engagement strategy is a significant investment in establishing
Resident Advisory Boards (RABs). RABs are designed to give residents an
opportunity to work directly with our team to help shape their local
community, express their concerns, and share their ideas and problem
solve with our management team. Residents in each neighborhood elect
representatives to work with the Lendlease Project Company and the
installation's Military Housing Office. Currently, there are over 70
RAB members across our Army and Navy portfolios.
Customer Experience Training--We have developed a series
of mandatory staff training modules focused on enhancing customer
service skills.
Resident Portal and Smart Phone App--Lendlease was the
first of the MHPI partners to utilize a resident portal and smart phone
app, Military Cafe, in 2018. Amongst other things the Portal and App
allows residents to request maintenance, upload photos of the issue,
and receive updates on the progress of their Service Order, and arrival
of their technician. We continually work with software engineers to
launch regular app updates so that the tool represents best practices
in mobile customer care.
Quality and Timely Resident Communication--We
transitioned to a single platform for mass resident communication,
RedFlag, in January 2020. RedFlag is a notification system for
residents to receive standard mass resident communications and
emergency notifications via text and email, as well as mass voice
calling, from the start of their residency.
Maintenance Solution Center--This is a new virtual
dispatch solution to replace our outsourced call center and allows
residents to schedule work order requests, customize and schedule
repairs, and talk directly to a team member if they need guidance or
have specific questions. The Solution Center creates a single
environment for all service orders to be received and managed by in-
house staff across our portfolio. This technology permits us to better
troubleshoot problems and ensure a technician with the right skill set
and tools arrives at the home at the earliest possible opportunity.
Ms. Houlahan. It is my understanding that some of the ``tenants
bill of rights'' provisions are set to take effect this summer,
including tenants' access to maintenance records and the ability to
withhold rent if there is a dispute. Where are your companies in its
efforts to implement these changes?
Ms. Tregarthen. Lendlease submitted formal certification to each
military service, agreeing to all proposed measures in the tenant bill
of rights (TBOR), including a universal lease, dispute resolution
process and the ability to allow tenants to withhold rent until
disputes are resolved. Additionally, the TBOR is posted on every one of
our project websites to increase transparency and trust with our
residents.
Lendlease is the first military housing partner to voluntarily
provide a 7-year maintenance histories to all prospective residents for
homes they are considering leasing. Lendlease also has voluntarily
agreed to implement the remaining rights at our existing housing
projects by June 1, 2021, in time for the Permanent Change of Station
moves that will take place in calendar year (CY) 2021. Lendlease has
outlined plans to implement an informal dispute resolution process that
is streamlined nature and easy to use. Team-member training for both
the informal and formal dispute resolution processes have begun,
including when and how to segregate rent if necessary.
Lendlease is updating all project-specific resident guides to
ensure they are compliant with and complimentary to the universal
leases and relevant NDAA requirements concurrently with the roll-out of
the finalized and approved universal lease. Team training on the
universal lease is underway while we await its finalization.
Ms. Houlahan. I understand that there have been allegations
regarding irregular reporting in your maintenance records and unsafe
housing conditions. What steps are you taking to strengthen your
housing maintenance system and improve transparency? How are you
working with families to rebuild trust?
Mr. Taylor. The Assurance team regularly analyzes data from our
maintenance system and reviews it with our maintenance teams at the
properties. The Assurance team also reviews employee compliance against
company policies and report their findings to senior leadership for
corrective action as needed. Our Assurance team also performs on-site
inspections at the properties on an annual basis to further review
compliance and provide coaching and mentoring to the maintenance team.
Reports are compiled with their findings and communicated to the
management team. Any corrective actions are completed and monitored for
future compliance. Monthly training is conducted with all property
staff as part of an annual training plan to ensure continuous
improvement of both their technical and customer service knowledge and
skills. In addition, we provide training regularly as to compliance
with company policies and procedures, including but not limited to our
Code of Conduct.
To ensure greater transparency in the work order management
process, residents receive an email for each change in work order
status and they have the ability to view (via online portal or mobile
app) all work order information in our system including before/after
photos of the repair. Before a work order is closed in our system, the
resident is contacted to confirm the work has been completed to their
satisfaction and all aspects of the repair are working properly.
In addition, an online survey from a third-party survey company is
issued after every new resident move-in and completed/closed work
order, asking the resident to rate their experience and level of
satisfaction. These survey responses are received in real time by both
our senior leadership, local property team and the Army/Navy Air Force
housing office. Our teams follow-up directly with any resident that
rates their experience at 3.50 or lower (5.00 is the highest rating) to
understand where we fell short and how we can correct or improve.
We are further working to rebuild trust with residents through more
robust communication programs that include quarterly housing town halls
conducted with local Command, monthly resident newsletters and ongoing
community updates and notifications and updates provided through our
online resident portal and mobile app, email and social media channels.
Ms. Houlahan. It is my understanding that some of the ``tenants
bill of rights'' provisions are set to take effect this summer,
including tenants' access to maintenance records and the ability to
withhold rent if there is a dispute. Where are your companies in its
efforts to implement these changes?
Mr. Taylor. Balfour Beatty Communities has fully supported, and
continues to support, implementation of the Department of Defense's
tenant bill of rights. We remain committed to ensuring service members
and their families have access to safe, quality, and well-maintained
homes, along with fair treatment.
We continue to work jointly with the Services toward implementing
all components of the tenant bill of rights and completing the actions
necessary to incorporate all rights and procedures necessary to
administer those rights within our military housing project legal
documents. This includes our adoption of a Universal Lease that,
subject to lender consent, will be used across all of our military
housing installations, and includes the provision of a seven-year
maintenance history for all housing applicants and existing tenants, a
process for dispute resolution available to residents and procedures
that allow residents to withhold rent until disputes are resolved.
Over the last several months we have started to provide the 7-year
maintenance history to incoming residents at three of our sites through
a proactive pilot program. We are now actively working on rolling out
the 7-year maintenance history at the remainder of our sites and expect
it will be fully implemented during the second quarter of this year.
Regarding the Universal Lease, we are in the final stages of developing
the state/community-specific addenda for each project location that is
necessary to ensure compliance with state and local landlord/tenant
laws.
We also are awaiting formal guidance from the Services regarding
the dispute resolution policies and procedures that will be followed
and administered by each installation's Military Housing Office in
order to align these with our lease packages, including our resident
guides and resident lease training. Once these lease materials are
completed, we then will seek approval for use by the relevant Service
Branches and project lenders on agreed procedures for rent withholding
under our project financing agreements.
In concert with the Department of Defense, we are committed to
initiating use of the Universal Lease within our military housing
portfolio by June 1, 2021 to the extent we are able to obtain review
and concurrence from all stakeholders by such date.
Ms. Houlahan. I understand that there have been allegations
regarding irregular reporting in your maintenance records and unsafe
housing conditions. What steps are you taking to strengthen your
housing maintenance system and improve transparency? How are you
working with families to rebuild trust?
Mr. Cowley. Regarding past allegations of irregular reporting and
other fraudulent behavior, the previous property manager on the four
Army projects was removed in 2015. Since then, the projects are not
familiar with any allegations of intentional misconduct related to
reporting.
With respect to any allegations of unsafe housing conditions,
resident safety is the projects' top priority. Allegations are
investigated and addressed in partnership with the property manager and
government housing office. The projects have taken numerous steps to
strengthen housing maintenance systems.
Examples from the various projects include making significant
investments to improve maintenance operations, including a new mobile
device app to enable routine work order submission and tracking by
residents, improved work order scheduling options to increase
convenience for residents, hiring of an in-house master electrician,
and dedicated emergency maintenance personnel to increase
responsiveness on our most critical work orders.
In order to improve transparency, the government staff at each
installation is provided access to the property manager's maintenance
software systems, as well as access to all resident responses to
satisfaction surveys sent after work orders are completed. In an effort
to strengthen trust with residents and their families, projects have
increased communication efforts with current and future residents.
Specific to each location, initiatives may include monthly resident
newsletters, a multichannel One Call Now communication system, and
email campaigns to incoming residents with helpful information at
strategic points prior to their arrival. These increased communication
and education efforts help to supplement the existing 24/7 maintenance
hotline, resident portal, quarterly installation Town Hall meetings,
Facebook pages, and community management offices. In addition, many
projects have implemented third-party and government inspections. These
occur prior to occupancy by new families and/or for specific work order
categories.
Ms. Houlahan. It is my understanding that some of the ``tenants
bill of rights'' provisions are set to take effect this summer,
including tenants' access to maintenance records and the ability to
withhold rent if there is a dispute. Where are your companies in its
efforts to implement these changes?
Mr. Cowley. Please see response above.
______
QUESTIONS SUBMITTED BY MS. STRICKLAND
Ms. Strickland. We have heard concerns that privatized military
family housing providers use commanders to stifle the voices of service
members and their families. Can you discuss how you communicate with
commanders? Please include any asks of the commanders to intervene or
counsel a service member.
In the hearing, you mentioned that you attempt to proactively
educate service members. Given the tendency to involve commanders how
do you work to educate the commanders you communicate with?
How often would you say that you involve commanders when a tenant
complains about an issue? Over a six-month period? Over a year?
After you involve a commander in an individual's case, how often
would you say that the tenant follows up if the reported issue persists
or gets worse?
General Aycock. Typically, the chain of command reaches out to
Corvias on behalf of the service member. We try to work directly with
the service member to resolve any issues or concerns and limit
involving chain of command. Reaching out to chain of command is a last
resort. Should we find a need to involve the chain of command, the
first step is to speak with the military housing office and/or garrison
and they usually initiate the communication with the chain of command.
Examples of when a chain of command's support may be requested
include extreme housekeeping concerns which would be considered a
health and safety issue or a service member refusing to set up a
payment plan or not honoring an established plan with respect to
charges--which would otherwise result in assigning a servicemember to a
collection agency.
We try to educate service members by sending out friendly reminders
and contacting them and discussing any violations and referring them
back to our Resident Responsibility Guide, which outlines policies and
procedures. In some cases, we will engage the housing partner. We work
closely with garrison Commanders and their staff on a weekly basis,
including regular briefings, status reports, and other methods to
ensure that we move forward in a coordinated fashion.
Our garrison partners have typically asked to be informed if there
is a potential need for their involvement with tenant-related matters,
particularly if the tenant has expressed concerns regarding their
health or safety, has indicated that they will take legal action
against the partnership, or when they have indicated that they elevated
their concerns outside the garrison (e.g. the media or other
stakeholders). garrison Commanders may also be engaged by the tenant
directly via submission of an Interactive Customer Evaluation (ICE),
through the commander's open-door policy, or other methods available to
them.
When a garrison Commander becomes involved, the resident is
typically more likely to follow-up should the issue persist, or their
concerns are otherwise not addressed. We generally find that our
residents are comfortable engaging with their chain of command for
support and the commanders we engage with strongly support their
residents' reasonable requests. In addition, in these instances, it is
our procedure to follow up with the resident to ensure the issue has
been resolved and the resident is satisfied. The garrison Commanders we
work with generally expect us to keep them informed if the resident has
any additional concerns.
Ms. Strickland. Can you share some of the best practices you've
developed to respond to tenants and to ensure the health and safety of
the homes under your care?
General Aycock. Since 2019, Corvias has implemented a variety of
measures to strengthen the work order process. In addition, the COVID-
19 pandemic has prompted the adoption of more extensive health & safety
conscious practices aimed at ensuring that our residents feel safe and
secure throughout the leasing process.
Prior to any resident moving into one of our homes, each home is
subject to an inspection using an extensive checklist developed in
conjunction with our service partners. All necessary work is conducted,
checked for quality assurance by our property management team, and then
checked again by the Military Housing Office (MHO). This checklist is
included for residents to review, and its form is available to
residents as an addendum to the Universal Lease template being
implemented this summer.
We have also adopted more consistent standards for preventative
maintenance checks during a resident's tenancy. With respect to our
regular maintenance activity in response to resident work orders, we
ensure that there is ongoing feedback between residents and the
maintenance team. All emergency work orders are followed up with a call
to the resident to verify the work was done appropriately and discuss
next steps if applicable.
The military housing office (MHO) also follows up on all emergency
work orders to gauge resident satisfaction. A percentage of the urgent
and routine work orders are also selected for follow-up, including a
call to the resident to validate the work was completed correctly. A
survey is sent to every resident following the completion of a work
order to measure resident satisfaction. These results are tracked
carefully and reviewed weekly and monthly. Any resident that submits a
survey that falls below the benchmark requirements is contacted (if
they indicate they want to be contacted) to discuss what caused the
dissatisfaction, and this may trigger another work order to be opened
to complete the work satisfactorily.
As we continue to upgrade our PM Software, we are finding new ways
to reach out to residents to ensure that work has been completed
consistent with our standards and our residents' expectations. The
COVID-19 pandemic also prompted us to roll-out additional processes and
procedures to ensure the safety and well-being of our residents. This
included some restrictive measures--like closing amenities for a brief
period last summer--as well as the adoption of additional personnel
protective equipment, training for our employees on COVID-19, and pre-
work order surveys of our residents to ensure that they had not been
exposed prior to work being performed.
Encouragingly, COVID-19 also prompted the adoption of new solutions
for leasing, including virtual assistance and a virtual tour option
that we expect to retain over the long-term to better serve our
residents who are unable to visit prior to their PCS move. Essentially,
we are able to walk the servicemember through their potential home
virtually prior to their move in, which--in conjunction with the seven-
year maintenance history and other new resources--we believe ensures
that they have the most information about their home, absent the
ability to visit the home in person.
We are also developing and implementing new ways to communicate
with our residents and to respond to their concerns. We have strongly
supported development of DOD-wide informal and formal dispute
resolution mechanisms and are revamping our webpages and other means of
communications to make Corvias: Response to Questions for the Record--
``Privatized Military Family Housing: Update on implementation of
Housing Reforms'' April 16, 2021 contacting us easier-including
resident work order portals, direct contact via phone, and installation
level email addresses that residents can use to directly contact our
most senior leaders at each installation if they feel their concerns
are not being properly addressed.
Ms. Strickland. At JBLM, we've heard concerns about how long it
takes to turn over units on post. Can you tell me why it would take a
so long in some of your units?
Can you discuss best practices for more rapidly turning over units
to meet demand?
General Aycock. Our goal is to always accommodate a door to door
move for our Service Members and their families. Average turn times are
tracked through the system and reported to Executive and Asset
Management levels through an operational quarterly review. All areas of
the facility and turn operation are evaluated when these metrics are
not being met consistently.
Corvias Property Management has developed policies and procedures
to guide our maintenance technician through the process of turning a
home within the set timeframe of 10 business days. The majority of our
installation teams are able to meet this benchmark, but there are
occasions that the condition of a home makes it impossible to have a
10-day turn. Our process begins with a move-out inspection where all
the needed repairs are identified and documented via photos and notes.
A checklist is left in the home with this information and a technician
is assigned to the home to complete the full scope of turn needs.
The checklist becomes the guide to complete the turn in a timely
manner by efficiently scheduling contractors and gathering needed
supplies for all repairs. The scheduling is tracked through a
designated Service Center Coordinator utilizing our property management
software system. The Leasing Consultant who procures the assignment or
lease is included into the process to ensure that the turn is meeting
the timeline requirements and future residents' expectations.
Ms. Strickland. Service members and their families make enormous
sacrifices for this country and substandard housing is an insult to
that sacrifice and a threat to military readiness. Can you expand on
best practices to build the trust of the people under your care?
General Aycock. The best practices used by Corvias to ensure trust
with our residents are set from the first contact with a new resident
moving in and are further built on working closely with residents
during their time in a home managed by Corvias. We work closely with
the military from the Installation level to the Pentagon to ensure
transparency and accountability in the Military Housing Privatization
Initiative (MHPI) program.
Move-in. When a new resident arrives, we personally work with them
to ensure they understand how their home is set up, we walk through the
lease agreement, and we ensure they know how to reach us in person, by
phone, online, and by text to initiate any necessary work order. We ask
all residents to provide us with feedback about the move-in process. We
receive predominantly positive comments as a result of this process
and, in the rare event of an issue, we immediately take action to
resolve the challenge.
Work orders. When a resident reaches out to us to fix an issue with
their home through one of the multiple ways we take in work orders, we
respond quickly and professionally. After the fix, we follow up with
residents to ensure the quality of the repair. We ask for voluntary
feedback on the repair.
Corvias has earned numerous national level customer satisfaction
awards from SatisFacts, the approved provider of this independent
thirdparty review, based on direct input from our residents. Permanent
Change of Station (PCS). During the Summer of 2020, the Department of
Defense implemented a compressed PCS season with an emphasis on door-
to-door moves to minimize potential transmission of COVID-19 to protect
families.
We worked closely with the inbound and outbound resident to closely
coordinate their moves and the through between occupancy maintenance of
each home. Town Halls. At each Installation, our senior housing
official attends the quarterly Installation town hall to respond
directly and in public to any housing that are brought forward.
As requested by Representative Speier, we have also committed to
ensuring that Major General (Retired) Al Aycock, our Military
Partnership Executive, attends a town hall at each Installation within
the next year where Corvias is a partner. We are proud to be a member
of the MHPI partnership at each of the Installations we serve and
operate in a transparent and accountable way with all our residents.
Please see the responses to QFRs 68 through 70 for additional
explanation regarding best practices we implement.
Ms. Strickland. We have heard concerns that privatized military
family housing providers use commanders to stifle the voices of service
members and their families. Can you discuss how you communicate with
commanders? Please include any asks of the commanders to intervene or
counsel a service member.
In the hearing, you mentioned that you attempt to proactively
educate service members. Given the tendency to involve commanders how
do you work to educate the commanders you communicate with?
How often would you say that you involve commanders when a tenant
complains about an issue? Over a six-month period? Over a year?
After you involve a commander in an individual's case, how often
would you say that the tenant follows up if the reported issue persists
or gets worse?
Ms. Tregarthen. As an active member of our military housing
installation, Lendlease project teams communicate regularly with the
commanders. Communication varies by installation, and may include the
following:
Weekly garrison team meetings with installation
stakeholders;
Monthly written communications to Brigade Command Team;
Housing 101 brief to incoming command;
Town halls;
Monthly RAB meetings and training sessions;
Command ``home visits'' when requested for dissatisfied
residents;
Meetings/home visits with dissatisfied residents and
other stakeholders as part of the dispute resolution process chaired by
garrison Commander (as required); and
Monthly Army summit meetings with LTG Gabram to review by
garrison every key metric via scorecard.
When a new commander takes over command, Lendlease project team
leadership participates in the commander's orientation and introduction
to the installation. Typically, a half day is scheduled with the new
commander to brief him/her on the following topics:
Housing Privatization 101--corporate structure and
financial overview of the Project Company;
Overview of the Project--high level project status,
including ongoing or planned development work; and
Customer Care--how we execute our vision to create
outstanding communities where military families live, work and thrive.
This briefing is usually followed by a tour of the community and a few
example homes. The education continues throughout the commander's
tenure through a series of planned and impromptu meetings and
communications as outlined above.
At all project locations we regularly work with the garrison
Commander teams and Wing Commander teams in an open and collaborative
manner. The frequency of a Commander's involvement depends on the
individual installation, but the intention is to satisfactorily resolve
resident issues at the project level without the involvement of the
Commander. In most cases, if a resident is not satisfied, the Housing
Officer (local RCI or MHO) is engaged immediately by the property
management team (or the resident) per our internal processes, which is
consistent with the new dispute resolution process outlined in resident
guides. Based on a review of our portfolio, we notified base leadership
approximately 21 times of resident concerns over the past year. On one
occasion the Commander directly addressed the concern with the
resident.
Across our communities, residents have multiple avenues to register
a complaint or bring up an issue to the command or the command becomes
aware of a complaint or issue. If a resident has a complaint that we
are unable to satisfy, we will involve the Military Housing Office
(MHO)/RCI team first. If the issue is unable to be resolved, we will
involve the Commander--This rarely happens. Resident includes the
Commander on emails to property management office. Resident files a
Congressional Inquiry or an IG complaint. ICE comment ``Ask the
Commander'' email. Commander's Hotline. For AF--the resident contacts
the AF Resident Advisor. RAB member makes Commander aware of a resident
issue.
In almost all cases we are able to resolve resident concerns and
issues without needing to go to the command to assist with the
resolution. When a Commander gets involved due to a resident issue,
often times, representatives from our property management team as well
as Directorate of Public Works (DPW), Military Housing Office (MHO) and
the resident's chain of command meet at the residence to conduct a
walk-through of the home to personally see and hear the residents'
concerns. We will also provide information such as 7-year maintenance
history. Nothing is more important to us than ensuring the military
families we serve have the safe and quality housing they deserve; and
we make every effort to respond to and address all concerns in a timely
manner.
In the past 12 months, we are unaware of any issue persisting or
getting worse. To ensure resident issues are addressed satisfactorily
after a commander's involvement, we proactively follow up with them.
They receive calls from the community/property management office at
least once per week for a month from the date of resolution of their
work orders. This allows us to stay in regular contact and ensure the
issue is resolved and does not persist. This communication remains at
the project level with the resident.
Ms. Strickland. Can you share some of the best practices you've
developed to respond to tenants and to ensure the health and safety of
the homes under your care?
Ms. Tregarthen. We have made broad-ranging improvements across our
portfolio, including more frequent inspections by Lendlease and our
military partners, more property management services performed by more
highly trained personnel, and more options for our residents to
communicate with us, including online and via our smart phone app. As
part of our efforts to better manage issues related to older homes
within our portfolio and improve the housing experience for our
residents, we instituted Environmental Management Plans at each
installation, which include the following:
Enhanced lead-based paint inspections;
New mold-inhibiting paint and primer;
Utilization of enhanced HVAC filters;
Expanded change of occupancy maintenance and improvement
program, including inspections by our military partners; and
Improved moisture testing to pinpoint the source(s) of
any moisture in a home.
We have made broad-ranging improvements over the last two years to
meet the NDAA requirements, highlights which are included below:
Provide seven-year histories to all prospective residents
for the homes they are considering leasing;
Ensure most homes are inspected by our military partners
before they are made available for lease to a new resident--the Army
and Air Force inspect 100% of homes and the Navy/Marine Corps inspect
most homes as they are ramping up their staffing to achieve 100%
inspections;
Perform high quality property management services with
appropriately trained, courteous customer service and maintenance
staff;
Provide multiple, convenient methods for resident to
communicate directly with property maintenance staff and to receive
consistently honest, accurate, straightforward, and responsive
communications;
Provide resident access to an electronic work order
system in which residents may request maintenance or repairs and track
the progress of the work;
Inform residents of the required time frames for
requested maintenance or repairs;
Relocate residents to suitable lodging or other housing
at no cost until maintenance or repairs are complete as necessary;
Provide advance notice to residents of entry into the
housing units, except in the case of an emergency or abandonment of the
premises;
Prohibit the use of nondisclosure agreements in
connection with leases of privatized military homes; and
Install carbon monoxide detectors in homes in accordance
with applicable requirements.
Additionally, we have implemented the following customer focused
improvements over the past two years, many of which directly enhance
some of the provisions included in the FY20 NDAA:
Established Resident Advisory Boards (RABs) for Army and
Navy installations, and worked in tandem with the Air Force to support
its Resident Councils program;
Added a Customer Care Director leadership role and
Customer Care roles at all our projects;
Required Customer Experience training for all staff;
Activated and continued to develop a resident portal and
smart phone app for all residents;
Implemented a resident communication tool, RedFlag, to
enable both targeted and installation wide communication to residents;
Implemented our Maintenance University program to assess
and develop the skills of all maintenance staff; and
Improved the maintenance service request process to
ensure residents receive timely updates with useful information and are
afforded multiple opportunities throughout the experience to provide
feedback, ask questions or identify issues or challenges.
All residents have access to our quality surveys through
SatisFacts. Each time a service order or other service is delivered to
our residents, they can utilize the system to inform us how satisfied
they were with the work on a scale of 1-5 by simply using the star
ratings. Any surveys less than 3.5 stars are proactively responded to
by our property management team to assess how we can resolve any
outstanding issues and better serve our residents.
Ms. Strickland. At JBLM, we've heard concerns about how long it
takes to turn over units on post. Can you tell me why it would take a
so long in some of your units?
Can you discuss best practices for more rapidly turning over units
to meet demand?
Ms. Tregarthen. First, to clarify, Lendlease does not manage the
housing at JBLM. During the six-month period from October 2021 thru
March 2021, the projects' average time to complete a full Change of
Occupancy Maintenance (COM) ranged from 13 to 24 days. This does
represent an increase in COM time as compared with previous periods.
There are two primary drivers of the COM time increase:
Enhanced safety protocols stemming from COVID-19, and
specifically the need to reduce the number of team members working
within a home at any given time to ensure proper social distancing. As
a result, the time to complete painting, maintenance, cleaning,
preventive maintenance and any CRR requirements have increased.
Enhanced internal quality-control procedures combined
with a heightened government inspection QA process. These dynamics have
resulted in modified/increased COM scopes to address potential
deficiencies that may be identified during the government inspection.
The most significant best-practice to manage COM time is a coordinated
government inspection process that allows for the project team to
address identified issues in a home (if any) in real-time during the
actual inspection so as to streamline this process and achieve a
passing evaluation.
As of today, (April 8, 2021), there are 247 unrented, vacant homes
in a ready status (i.e., the ``ready-rack'') for any service member and
family who arrives requiring/requesting an immediate move-in. We
continue to prioritize and support COM production levels above the
monthly move-out activity as a means of supporting occupancy
requirements and boosting the ``ready-rack''. Note for the most recent
calendar quarter (January 2021 thru March 2021), there were a total of
3,670 move-outs with 4,245 COMs completed.
Ms. Strickland. Service members and their families make enormous
sacrifices for this country and substandard housing is an insult to
that sacrifice and a threat to military readiness. Can you expand on
best practices to build the trust of the people under your care?
Ms. Tregarthen. We continue to be open and transparent with our
residents. In order to build greater trust, in 2020 Lendlease launched
a new Customer Care Program based on a commitment to five pillars: Safe
and Healthy Homes, Quality and Consistent Service Experience,
Communication and Education, Organizational Culture of Caring, and
Sense of Community.
Under the program, we successfully identified and are implementing
new ways of listening to and engaging with our 123,000 residents across
more than 40,000 homes.
We added new customer care managers across our portfolio who work
with Project Company leadership, installation leadership and residents
to identify and implement customer care driven solutions that are
timely and professional.
We launched Resident Advisory Boards to directly connect residents
to our teams to foster collaboration and ensure housing issues and
quality of life concerns are quickly addressed and best practices are
established, shared, and implemented.
We introduced a new smart phone app that contains a volume of
information easily accessible to residents, including the ability to
initiate and track service orders.
We introduced new mold-inhibiting protocols, including mold
inhibiting paint and primer, enhanced filter protection, and new
ventilation systems.
We continue to invest in digital technology to improve all aspects
of our business, with a focus on customer service technology.
We have sought significant feedback from our residents to clearly
understand, firsthand, how we can improve our performance.
We also collaborate with advocacy groups, such as the Safe Military
Housing Initiative, to gain a deeper appreciation of issues facing
military families living in our communities.
Ms. Strickland. We have heard concerns that privatized military
family housing providers use commanders to stifle the voices of service
members and their families. Can you discuss how you communicate with
commanders? Please include any asks of the commanders to intervene or
counsel a service member.
In the hearing, you mentioned that you attempt to proactively
educate service members. Given the tendency to involve commanders how
do you work to educate the commanders you communicate with?
How often would you say that you involve commanders when a tenant
complains about an issue? Over a six-month period? Over a year?
After you involve a commander in an individual's case, how often
would you say that the tenant follows up if the reported issue persists
or gets worse?
Mr. Taylor. As part of our day-to-day military housing operations,
we are working directly with both installation Command and the Military
Housing Office staff on an almost daily basis. These connection points
include updates and discussions regarding community operations
including stats and highlights regarding leasing and maintenance
activity, as well as the status of any major projects underway in the
community, changes to community policies or procedures, and upcoming
resident events and programs.
We also regularly engage on any health/safety-related work orders,
resident displacements, resident requests for accommodation and
escalated resident complaints as and when they arise. We share this
information with Command and the Military Housing Office staff for
transparency within our partnership and to ensure they can advocate for
their service members as needed. In addition, we are in the process of
implementing the Universal Lease protocols required by the NDAA, which
includes a dispute resolution process that involves additional
engagement by the Command and Military Housing Office in regard to
resident disputes.
Our experience shows local Command involvement does not deter
residents from following up if reported issues persist or get worse.
Rather they see they have an additional advocate in Command and their
local Military Housing Office to help understand and resolve the issue
at hand.
Ms. Strickland. Can you share some of the best practices you've
developed to respond to tenants and to ensure the health and safety of
the homes under your care?
Mr. Taylor. Two years ago, we conducted a comprehensive review of
our business and restructured and optimized every aspect of our
operations, ultimately transforming the way in which we run our
privatized military housing program. Over the past two years, we have
recommitted ourselves to providing residents with safe, quality homes
supported by superior customer service and prompt, effective
maintenance support.
Our team has focused on improving maintenance services and
operations, strengthening quality assurance and compliance, developing
enhanced environmental-related policies and procedures, including for
mold/moisture issues, and delivering the highest level of responsive
customer service to residents. The following is a high-level overview
of the steps we have taken to date.
Realigned our leadership structure to ensure we better
align technical and customer service responsibilities and improve
oversight.
Invested in an enhanced property performance management
system (Microsoft Power BI) to better track key metrics and generate
reporting for internal and external stakeholders; and strengthened
coordination with local installation command and housing partners,
including more frequent reporting on metrics and resident relations.
Implemented a more robust preventive maintenance program
that includes quarterly visits to each home, allowing our teams to
identify any emerging issues in a timely manner, perform basic
maintenance tasks, and ensure all systems and home features are working
properly.
Engaged a national HVAC specialty company (Motili) to
manage and maintain the HVAC systems in all homes across our military
portfolio, including rigorous preventive maintenance and, as-needed,
repairs and replacements.
Increased transparency in the work order process by
launching the RENTCafe mobile app for the real-time submission and
tracking of work orders and access to work order data.
Amended work order closeout process to include resident
sign-off indicating that the work was completed to their satisfaction;
and currently rolling out an enhancement to allow residents to perform
their work order closeout via text message.
Increased our maintenance staff and added new roles
dedicated to quality assurance and control, environmental management
and resident engagement; and retained additional third-party
contractors for specialty services like mold and moisture remediation.
Appointed a head of training and development and added
significant employee training resources; and developed and implemented
an enhanced training program focused on understanding and compliance
with all policies and procedures, and strengthening customer service
skills.
Increased transparency and communication with residents
through the launch of an online Resident Portal, monthly newsletters,
quarterly `town hall' meetings with military partners, and ongoing
email. In addition, through our membership in the Military Housing
Association, we regularly work with other owners of MHPI projects to
share best practices regarding military housing operations.
Ms. Strickland. At JBLM, we've heard concerns about how long it
takes to turn over units on post. Can you tell me why it would take a
so long in some of your units?
Can you discuss best practices for more rapidly turning over units
to meet demand?
Mr. Taylor. [No answer was available at the time of printing.]
Ms. Strickland. Service members and their families make enormous
sacrifices for this country and substandard housing is an insult to
that sacrifice and a threat to military readiness. Can you expand on
best practices to build the trust of the people under your care?
Mr. Taylor. Please see our response above.
Ms. Strickland. We have heard concerns that privatized military
family housing providers use commanders to stifle the voices of service
members and their families. Can you discuss how you communicate with
commanders? Please include any asks of the commanders to intervene or
counsel a service member.
In the hearing, you mentioned that you attempt to proactively
educate service members. Given the tendency to involve commanders how
do you work to educate the commanders you communicate with?
How often would you say that you involve commanders when a tenant
complains about an issue? Over a six-month period? Over a year?
After you involve a commander in an individual's case, how often
would you say that the tenant follows up if the reported issue persists
or gets worse?
Mr. Cowley. A collaborative, professional, and mission-focused
relationship between the housing projects and their respective commands
is a key component of providing quality housing services to residents.
In this relationship, commanders often behave as advocates for
residents and can help to mediate issues between a resident and a
property manager, should they arise.
The projects communicate with their respective commands via regular
meetings to discuss a wide variety of matters. As it pertains to
residents, these matters may include issues such as enforcement of
community guidelines, managing disputes between residents, or
addressing concerns involving the health or welfare of a service member
or members of their family. On rare occasions, the commands counsel
service members, directly or via the government housing office, to
assist in resolving resident issues. It is the goal of all interested
parties to resolve any issues early and amicably; however, additional
resources are available to residents should they not feel satisfied
with the outcome.
At Army and Air Force projects, the command education process
begins with new commander in-briefs that provide an overview of the
project structure, command roles and responsibilities, and future
housing investment plans, among other topics. On an ongoing basis,
projects and commands meet frequently via various forums in order to
keep commands informed in regard to updates to project matters.
Specifically at Pacific Beacon, the project works to educate
commanders starting from the initial change of command: the Prospective
Commanding Officer tours the community and deliberate measures are
taken to ensure the Prospective Commanding Officer meets the full
property management team, receives a full overview of the community,
and is able to ask any preliminary questions.
Emphasis is placed on the importance of customer service, quality
of work, and safety protocols in the community. Moving forward, regular
recurring meetings are conducted at least quarterly to ensure any
community-related trends or requests for support are addressed. The
quarterly town hall meetings are another opportunity for the Commanding
Officer and property manager to connect on any new or ongoing issues.
At Army and Air Force projects, commands typically become involved
in issues raised by residents via the Exception to Policy (ETP)
process. If a resident has a concern and is not satisfied with the
property manager's resolution efforts, the resident may submit an ETP,
which is reviewed by the project and the military. Below are the
projects' approximation of how frequently this process is used and an
examples of frequently-seen resident requests:
Belvoir: Approximately 1 ETP per month and approximately
1 complaint elevated to garrison Commander per quarter. The most
frequently requested ETPs involve families asking the project to waive
transfer costs when desiring to move to another Village prior to
fulfilling their current lease term.
Benning: Approximately 5-10 ETPs per month. The most
frequently requested ETPs involve a family requesting to stay in
housing while the service member is deployed or PCSed to a different
installation, or approval to keep RVs in driveways beyond the standard
two-week limitation.
Irwin/Moffett/Parks: Approximately 1-2 ETPs per month at
each location. The most frequently requested ETPs are related to a
service member wanting a home that is larger than what they qualify for
or wanting to reside in a specific neighborhood.
Monterey: Approximately 1-2 ETPs per month. The most
frequently requested ETPs are related to a service member wanting a
home that is larger than what they qualify for or wanting to reside in
a specific neighborhood.
Andrews/MacDill: Approximately 1-3 ETPs per month at each
location. The most frequently requested ETPs are requesting to break a
lease early to buy a house, requesting to stay in housing when a
service member has PCSed to a different location, and long-term guest
requests.
For MacDill specifically, residents request ETPs to live in ground-
level homes (many homes at MacDill are elevated off the ground due to
flood mitigation measures). At Pacific Beacon, residents are able to
reach out about any issue through their chain of command. However, in
the last 12 months, no issues have been communicated by the chain of
command to the property manager.
In general, the project does not have visibility into the
satisfaction of each party and process for appeals or escalation once a
resident has engaged with the commander via the ETP process described
above. To the projects' understanding, a majority of the issues are
resolved to the residents' satisfaction.
Ms. Strickland. Can you share some of the best practices you've
developed to respond to tenants and to ensure the health and safety of
the homes under your care?
Mr. Cowley. While specific initiatives may vary across projects,
broadly speaking, best practices to respond to residents and ensure the
health and safety of homes include practices such as:
Comprehensive inspection program throughout residents'
tenancy. Multiple inspections by the property manager and Army
inspectors occur prior to move-in with annual inspections and routine
HVAC filter changes. Homes are inspected again during every work order
response, and each year a randomized selection of homes is inspected by
an independent third-party.
Additional inspections by the Army. Inspection by an Army
Industrial Hygienist prior to the unit being made available for move-in
on units that have undergone substantial remediation.
Accommodations for displaced families. Furnished
hospitality homes set up to facilitate planned or unplanned
displacements.
Additional staff to enhance resident communication and
trust. Increased budgeting for staff positions that focus on resident
communications and environmental issues. For example: Customer Service
Representatives, a Director of Marketing and Resident Communications,
and certified Mold and Environmental Hazard Assessors.
Environmental training. Annual environmental training for
all property management staff members.
Significant investments to improve maintenance
operations. This includes a new mobile device app to enable routine
work order submission and tracking by residents, new work order
appointment options to increase convenience for residents, and
dedicated emergency maintenance personnel to increase responsiveness on
our most critical work orders.
Focus on resident education. Initiatives include New
Resident Orientations to provide information on preventative measures
and resident responsibilities, the importance of timely reporting of
emergency maintenance issues, leak and mold detection and prevention,
best practices to prevent fires, benefits of obtaining renter's
insurance, facts about lead based paint, and important home features.
Residents are also informed about the multiple ways to submit service
requests 24 hours a day, seven days a week.
Ms. Strickland. At JBLM, we've heard concerns about how long it
takes to turn over units on post. Can you tell me why it would take a
so long in some of your units?
Can you discuss best practices for more rapidly turning over units
to meet demand?
Mr. Cowley. On unit turns, the property manager is focused on
completeness and quality. The time it takes to turn a unit is dependent
on the condition in which the previous resident left the home, staff
and vendor availability, and the time it takes the government housing
office to complete its inspection and sign off on the home. Note that
turns are prioritized based on waitlist demand. This means that a unit
may be in the turn process longer than others, but there may not
necessarily be a resident waiting to move into the home.
Efficient and well-executed turns require coordination across the
property management staff, thirdparty vendors, and the installation.
Specifically, best practices would be:
Intelligent forecasting. Obtaining a regular gains/loss
roster from the installation to get an accurate picture of high demand
season move-outs.
Proactive inspections. Proactively inspecting units 30
days prior to resident move-out to identify long-lead items (e.g., HVAC
or appliance orders) and to complete minor repairs that can be
performed before move-out, as well as to educate residents what they
can do to limit move-out damage charges.
Outsourcing preventative maintenance. Performing HVAC
preventative maintenance with a qualified contractor on each turn so
that the property manager's turn staff can focus on other components of
the turn.
Paying contractors quickly. Pre-funding monthly turn
expenses to the property manager for prompt payment to contractors upon
completion of a turn.
Contractor onboarding. Focusing on training and
expectation management for vendors so that they are prepared for high-
volume turn seasons.
Setting expectations for overtime. Preparing property
management staff for high-volume turn seasons and budgeting for the
corresponding overtime hours.
Developing in-house staff. Cross-training property
management staff to be flexible during heavy turns so that they can
step into a variety of roles as needed.
Increasing roster of qualified contractors. Ensuring
multiple vendors are available and approved through the vendor vetting
process to conduct increased volumes of change of occupancy management.
Enhancing vendor communication. Engaging each on-site
vendor daily to ensure community requirements, including unit turns,
are prioritized appropriately.
Increasing supply inventory. Ensuring an adequate
backstock of any furniture or appliance replacements are on-site since
the project provides fully furnished housing accommodations.
Ms. Strickland. Service members and their families make enormous
sacrifices for this country and substandard housing is an insult to
that sacrifice and a threat to military readiness. Can you expand on
best practices to build the trust of the people under your care?
Mr. Cowley. The projects appreciate the enormous sacrifices made by
the service members and their families and are committed to the mission
of providing quality housing to everyone who calls our communities
home. With nearly half of the asset management team members having
served in our nation's military, we understand firsthand the importance
the home front has on the battle front. To that end, our communities
have gone above and beyond in their efforts to strengthen confidence
amongst our residents. Best practices include:
Enhanced communication efforts with current and future
residents.
Solicitation of additional resident feedback through
multiple channels, including military surveys, third-party touchpoint
surveys (at move-in, at move-out, and after every work order), third-
party sentiment surveys every 90 days, annual military-wide
standardized surveys, quarterly Town Hall meetings, and the Village
Mayor program.
Increased monitoring and resident education related to
maintenance concerns, including the implementation of ``hotspot
checklists'' to proactively check areas in the home that may experience
water intrusion or other maintenance issues.
Expansion of inspections program to include several
quality assurance touchpoints for each home over the duration of a
service member's residency. Before move-in, up to 1,000+ inspection
points may be examined and upheld across multiple assessments. After
move-in, every home may receive annual inspections and routine HVAC
filter changes. Homes may be inspected again during every work order
response, and each year a randomized selection of homes may be
inspected by an independent third-party.
Providing residents with educational materials, including
resident handbooks, online maintenance tips, video posts, and
environmental brochures.
[all]