The Housing Authority of Baltimore City has finally done the right thing in paying the remaining $6.8 million it owed in lead paint liability claims. Had the agency not worked so long to avoid its legal responsibility for the damages caused by past negligence, those suffering the consequences of lead poisoning from public housing might have been helped much sooner, and the agency might now be in a much stronger position to handle its potential future liability from other claims. Nonetheless, this action at least sets a precedent that the agency will not in the future seek to ignore its legal responsibilities.
The payments cover six cases dating from before 1996, when the housing authority came into compliance with new state lead abatement laws, and it represents the first time the agency has gotten approval from the federal department of Housing and Urban Development to use funds meant to subsidize low-income housing to cover lead paint judgments. Previous payments for another $5 million worth of judgments came from other sources. Still, the agency hasn't come close to closing the book on its potential liability for lead contamination. At latest count, the housing authority faces 316 active cases, and more could be filed.
Housing Commissioner Paul T. Graziano had previously cited the volume of the agency's potential liability as the reason it had not paid the judgments against it. By his reckoning, the housing authority faces $928 million in potential claims, just from the cases he already knows about, and he had previously cited the risk that the agency could be bankrupted as a reason for avoiding the precedent of making payments. Meanwhile, though, the agency was spending millions on outside attorneys to pursue often dubious strategies to avoid paying claims to lead paint victims.
Mr. Graziano said in an interview this week that his agency has spent the last few years seeking some kind of global solution to the current and potential lead paint claims against it — perhaps something like the funds for Sept. 11 victims or those affected by the BP oil spill in the Gulf of Mexico — but that those ideas proved not to be feasible.
Instead, the agency asked permission from HUD to use some of the $253 million in operating funds it will get this year from the federal government to cover the settlements, and it is now seeking permission to use more such funds in the future to set up a self-insurance pool to cover future claims.
The decision to do that was, admittedly, not an easy one for Mr. Graziano to make. The federal government is not providing the city with more money to handle these claims; in fact, its aid to the city is already some $30 million below what it should be because of sequestration and other budget cuts. The result is that payments to former tenants who were permanently injured as a result of substandard conditions in Baltimore's public housing will mean fewer opportunities for those who need help now. Mr. Graziano said his agency had been holding back on issuing all of its Section 8 vouchers this year in anticipation of the judgment, so no families will get kicked out of their housing as a result of these payments. But he said the $6.8 million would have covered about 700 vouchers for the year. If HUD goes along with the self-insurance plan, that, too, will mean fewer opportunities for families to get safe, affordable housing in Baltimore in the foreseeable future.
Nonetheless, making the payments was the right decision. Although there is no way to know for sure how much the agency might be on the hook for, it's a safe bet that it's much less than $928 million. The housing authority has been successful in the vast majority of the cases brought against it, and there is no reason to expect that it won't be in the future. We do not take lightly the fact that even a single loss in court can cost the agency millions — and by that, we really mean it will cost poor Baltimore residents who will be forced to live in sub-standard housing, if that. But when balancing the loss of opportunity for poor Baltimore residents in the future against a legal obligation to compensate lead paint victims, the scales must tip toward those who have suffered and will suffer permanent harm as a result of past negligence.