The dirt lot that cost taxpayers $764,000 sits on a grungy corner just outside Miami, strewn with slashed tires and beer cans and an official white sign, now covered by weeds, announcing Miami-Dade's promise to the poor:

Riverside Homes. Miami-Dade Housing Agency Funded Project.

Rivero

Here, behind a sagging chain-link fence, developer Oscar Rivero promised to build 24 houses for low-income families. Across town he promised 54 more, but that lot, too, is barren, occupied only by a contractor who uses the spot to hose down cement trucks.

For these two affordable housing projects, the Miami-Dade Housing Agency paid Rivero's development companies almost $1.6 million -- but not a single house was built.

It was the beginning in a series of illfated government deals that shook the foundation of public housing in one of the poorest and most distressed communities in the nation.

Empty Buildings: The Miami-Dade Housing Agency shut down the James E. Scott public housing complex and promised to build 411 new houses. But only three have been builtin six years. Earlier this summer, the abondoned buildings were strewn with trash. (Chuck Fadely/ Miami Herald Staff)

In the past five years, the Miami-Dade Housing Agency squandered millions of dollars on failed projects, pet programs and insider deals even as thousands of families languished in rotting and unsafe homes.

Aided by the agency's longtime director, a cadre of developers made out, raking in millions of dollars for homes that have never been built. From Little Havana to Liberty City, they took the money but left only empty lots, with broken baby cribs and bags of trash where houses had been promised.

Overall, the Housing Agency pledged more than $87 million to put up 72 developments for the poor, including apartments, houses and complexes for the elderly. The expected payoff: more than 8,300 new homes.

It was the centerpiece of the most ambitious affordable housing push in decades, and desperately needed in a county with a hurricane-battered housing stock, runaway home prices and a workforce stunted by stagnant wages.

Paper Promises: Ozie Porter saved $5,000 for an affordable house that was never built. She keeps a picture of it in her files. (Raul Rubiera/Miami Herald Staff)

But about 40 percent of the projects funded between 2003 and 2005 have been canceled. Others are delayed for months, even years.

Only 14 projects less than one-fifth of what was pledged have actuallybeen completed.

Worse: Even when houses were built, some developers under the watch of the Housing Agency bypassed the poor and sold to real estate investors who turned quick profits.

"That's terrible," said former U.S. Rep. Carrie Meek of Liberty City, who sponsored breakthrough legislation that created Miami-Dade's affordable housing construction fund. "I wanted to leave a legacy in this community. This undermines it."

Bus drivers, nurses' aides and construction workers suffered no place to live, no help from the government.

Ozie Porter saved $5,000 earning $10.44 an hour as a cafeteria cook. At 54, the longtime public housing resident is ready to buy her first house.

She found a rare three-bedroom priced for low-income buyers at $179,000 and took a tour in late spring, sweeping into the foyer under a crystal chandelier.

"Can you imagine," Porter asked, "walking through that front door every day?"

She turned to the builder, but the news wasn't good: More than 100 families were lined up to buy the house.

Porter pleaded: "Don't do that to me."

CASH MACHINE
LOTS OF MONEY SPENT BUT FEW HOMES BUILT

The Miami Herald spent seven months investigating every major building program at the Housing Agency, examining hundreds of project files, federal records, invoices, budgets, construction correspondence and government databases.

At every step, The Miami Herald found, the agency became an unchecked cash machine for developers and consultants and its own leaders and failed the families it was meant to serve. Consider: Rodriguez

• The Housing Agency paid more than $12 million to developers who promised dozens of houses but built only two, and years later, never returned the money.

• In some of those cases, the Housing Agency allowed developers to take the cash without signing loan documents or pledging land as collateral, leaving taxpayers on the hook with no easy way to recoup the money.

Rodriguez

• Longtime Housing Agency Director Rene Rodriguez ordered some of the payments even though projects were barely off the drawing boards and nowhere close to construction, a breach of fundamental county policy that put millions of dollars at risk. In one case, Rodriguez even delivered $1.5 million to a nonprofit group he was overseeing as president and chairman.

"It shouldn't have happened. There is no question," said Cynthia Curry, senior advisor to County Manager George Burgess.

• The agency diverted another $5 million money earmarked by state law to build homes for the poor to pay for a new office building complete with a $287,000 bronze sculpture of stacked teacups called Space Station that was shipped from Italy.

• County auditors have not acted in at least five years to ensure that the money was spent properly, though millions of dollars were riding on risky projects. Making matters worse: The Housing Agency, one of the nation's largest, acknowledges its computer files are flawed, with projects and money that disappear from one report to the next.

Homeless With Children: Elizabeth Garcia, right, and her children, Joe, 2, and Anir, 4, moved into a homeless shelter after Garcia's husband stopped helping with her $550 rent during a separation. The reunited family plans to move into a two-bedroom apartment. (Paul Rubiera / Miami Herald Staff)

• Beyond the spending, the Housing Agency repeatedly allowed developers to miss construction deadlines on badly needed buildings. On 12 projects alone, delays stretched a total of 13 years with costs rising and the poor sometimes forced to make up the difference in higher home costs.

• One of the agency's most high-profile projects replacing dilapidated public housing in Liberty City with 411 new homes is so marred by mismanagement that only three houses have been built in six years. More than $22 million has been spent while 800 poor families have been forced to relocate.

Keionta Mcrae, 11, has moved with her family twice since she left Liberty City five years ago. She dreams of a house with a pink bedroom. She lives in a house where rats eat through the floors.

"If I had my own room," said Keionta, who lives in a crumbling rental just down the street from Miami's chic Design District, "it would never get dirty."

• Meanwhile, developers entrusted with building new homes for the poor in Miami-Dade's most troubled neighborhoods have sold instead to real estate investors and wealthy buyers who netted big profits.

Investors Fredricka Trapp and her son Clifton bought nine houses built for the poor in Florida City, then sold them to a string of investors, reaping $175,000 in 14 months.

Said Clifton Trapp, who pleaded guilty last month to attempted cocaine trafficking in Miami-Dade: "It was a good investment."

WEALTH AND POVERTY
MIAMI IS NATION'S LEAST AFFORDABLE CITY

Miami's skyline glistens with sleek buildings, its suburbs with terra cotta estates, but for thousands of poor families who scrape by in the city's underbelly, home is a cramped rental apartment on the outskirts of town.

With pockets of intense poverty and an immigration rate that no other community has seen since New York in the first decade of the 20th century, Miami is the nation's least affordable city, The Miami Herald's analysis of census numbers shows. Here, Fernando Santana gets by earning $3 for every pineapple he sells from the back of his truck parked on a dusty corner of Little Havana.

The Housing Agency was supposed to become a vital lifeline to residents like Santana and to thousands of families hunting for a safe, clean, stable place to live. It is an agency flush with land and money.

In 1983, Miami-Dade became the first county in Florida to pledge construction loans to developers willing to build affordable homes. The money would come from taxes paid on commercial property sales.

The surtax program, fueled by tens of millions of dollars, was a lifesaver for some families. Between 2003 and 2005, some 2,600 homes were built.

Velma Bailey

But in 2002, the Housing Agency began engaging in a risky practice: Funneling surtax money to developers long before they started construction.

The advances for at least 11 major building projects over four years undermined the county's ability to produce housing and recoup loans from deadbeat developers.

County officials say the practice violated the Housing Agency's own policy, which prohibits cash advances so taxpayers' dollars aren't lost on projects that end up dead. to protect taxpayer dollars from d, "In no event shall the county provide advance surtax funding to the developer."

Yet, in one of the most questionable cases, the agency under orders from director Rodriguez cut a $500,000 check to Rivero's development company for a project never built: Riverside Homes, off Northwest 85th Street on the fringes of Little Haiti.

Crumbling Walls: Velma Bailey, a security guard, has moved her family from one rundown rental to another. Here, one of her children walks through a doorway careful to avoid crumbling walls. (Raul Rubiera/Miami Herald Staff)

The money was transferred even though records show Rivero had not started construction, did not have builders' risk insurance to protect the county from liability and had not paid the required $10,000 commitment fee to the Housing Agency.

"We had never done it like that before," said Tawana Thompson, who has run the construction loan program for nine years.

Thompson said her boss, Rodriguez, ordered a series of advances. She said the Housing Agency usually requires receipts, invoices and canceled checks documenting payments to contractors for construction before any money is paid.

The advances stopped when Rodriguez left the Housing Agency in 2004. Rodriguez did not return The Miami Herald's calls.

Today, four years after the Housing Agency advanced Rivero $500,000 and later paid another $264,000 the lot that was supposed to have "big, family-size units" has become a dumping ground with an expired building permit notice from Miami-Dade County tacked to the fence.

"They've been saying they were going to build something here for years," said Miguel Gonzalez, who lives across the street in a freshly painted yellow house.

Velma Bailey's children share beds in a rundown house infested with bugs. (Raul Rubiera/Miami Herald Staff)

Even with that project stalled, the Housing Agency gave Rivero's company $816,000 in 2004 for another building venture in Little Havana. Instead of spending the money on construction, however, records show Rivero told the Housing Agency he was going to use most of the tax dollars to pay down private debt.

Rivero, 36, an attorney and chairman of the Miami Parking Authority, is part of a small group of developers and consultants involved in some of the Housing Agency's most questionable projects.

In a written response to The Miami Herald, Rivero said, "The developments are progressing and I have full intention of repaying the funds allocated with all applicable interest."

But that hasn't happened. Rivero's loans are in default; the county filed suit this month.

Besides the $1.6 million, the city of Miami's Department of Community Development paid Rivero's company $530,000 for one of the two stalled building projects. The city's program is run by Barbara Gomez-Rodriguez, Rene Rodriguez's wife. They are now divorcing.

Rivero's development company was paid $530,000 for one of his two stalled building projects from the city of Miami's Department of Community Development, run by Barbara Gomez-Rodriguez, Rene Rodriguez's wife. They are now divorcing.

While the money flowed to Rivero's projects, some staffers at the Housing Agency raised a series ofconcerns.

In late 2005, after Rivero requested another $179,000 for Riverside Homes, Housing Agency loan officer Ana Sofia Rodriguez wrote in an e-mail, "The draw request is composed of soft costs only, again . . . construction for the project has not progressed as proposed."

She questioned the way Rivero planned to use the money:

• Reimbursing his own law firm and development group $9,000.

• Paying a general contractor $73,000 when no homes had been built.

• Making an $8,000 interest payment on another outstanding Housing Agency loan, essentially using Housing Agency money to pay back the same agency.

Fine Cup of Tea: A planned new office building for the Housing Agency is slated to include a $287,000 bronze sculpture from Italy of stacked teacups called Space Station. The money came from a construction fund earmarked to build homes for the poor. (Miami Herald)

"This is a tragic case of wasted time and money, neither of which Miami-Dade County can afford," said Sushma Sheth of the Liberty Citybased Miami Workers Center.

And the dollars have continued to flow, with Rivero awarded money again this year for three new projects.

The County Commission approved them in a sweeping package with money for dozens of other builders. Earlier this year, as the Housing Agency prepared to squash the projects, Rivero relinquished the money.

$5 MILLION ADVACED FOR AGENCY OFFICES
One of the most questionable recipients of surtax money is the Housing Agency itself.

State law is clear: The money can be used only to build or rehabilitate housing for the poor.

Yet when the Housing Agency wanted a new headquarters in 2003, it dipped into the surtax fund to put $5 million into the project. Three years later, nothing has been built.

The Housing Agency also has tapped into surtax money to cover budget cuts, partly because it doesn't receive any money from the county's general fund.

In 2005, when the federal government slashed the agency's funding, the Housing Agency drew on surtax dollars to cover a $9.6 million budget shortfall.

With the approval of county commissioners, officials promised to pay the money back over 10 years, saying no construction project will lose out.

"We didn't worry," said Housing Agency Finance and Administration Director John Topinka. "We know from experience that it takes several years for [building] projects to be completed."

Other questionable expenses taint the program.

Just this year, the agency got permission to use surtax money to pay $830,000 to a consultant for another two years of management for one of the Housing Agency's most delayed and troubled projects: the rehabilitation of the Scott/Carver public housing, which after six years is a wasteland of boarded-up buildings.

In another program, the Housing Agency used surtax money to pay a for-profit real estate company $50,000 to run "homebuyer education" workshops for the poor. But The Miami Herald found the agency paid thousands of dollars for people who said they had no idea their names were being used.

Another $200,000 went to the local Black Business Association for helping minorityowned contractors become certified with the county. But the association double-billed the Housing Agency, The Miami Herald found.

All the while, the Housing Agency has allowed building projects to linger for years through repeated delays.

Case in point: In 2001, the agency awarded the Allapattah Business Development Authority $1 million to help finance the construction of 30 townhomes on a bustling corner just off the Airport Expressway.

Five years later, the project still isn't done.

The nonprofit group, known as ABDA, got the money even though its last affordable housing project, Ralph Plaza 1, was delayed by lawsuits, liens and a contractor who was jailed in an unrelated kickback scheme.

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So far, the Housing Agency and its board have allowed ABDA to repeatedly push off the due date for its new project, Ralph Plaza II. ABDA also has proposed raising the price of its town houses from $112,000 to $145,000, passing on the costs to the poor.

In all, it's taken ABDA a decade to build the 44 apartments that'sabout four a year.

With so many affordable housing projects delayed or dead, advocates for the poor question why the county hasn't stepped in sooner. County Manager Burgess made a series of changes in recent months, but problems have festered for years.

WHAT'S BEEN BUILT (pdf)

"It's disgusting," said Lida Rodriguez-Taseff, an attorney who has represented low-income families with housing disputes.

The worst part, she said: "Nobody blinks an eye."

PROJECTS PENDING $940,000: 1817 NW 69th St. The Miami-Dade Housing Agency loaned developer Reynaldo Diaz, of the Infill Development Company, $940,000 in 2002 to build affordable, single-family houses. To date, almost every lot is still vacant and Diaz has yet to repay the loan, now in default, or the $90,240 in outstanding interest payments. (Al Diaz/Miami Herald) $600,000: 850 SW 13 Street In 2003, the Housing Agency awarded Merritt Housing $600,000 to build 159 units. But the contract was cancelled a year later with nothing built. (Carl Juste/Miami Herald) $1 million: 2225 NW 80th St. The Housing Agency in 2002 loaned developer Octavio Castellanos, of Personal Paradise Developers, $1 million to build about 20 affordable, single-family homes. Four years later, some of the houses have still not been built and the lots are vacant. The developer owes the Housing Agency $447,000 plus interest. (Carl Juste/Miami Herald) $2 million: 8800 SW 8th St. In 2002, the Housing Agency funnelled $2 million to MDHA Development Corp. for the development of an affordable housing project for the elderly. Four years later, nothing has been built. (Raul Rubiera/Miami Herald) $764,000: NW 85th St. and NW 5th Ave. In 2002, the Miami-Dade Housing Agency paid developer Oscar Rivero $764,000 for the construction of 24 townhouses for the poor. No homes were ever built, and the lot has become a neighborhood dumping ground. The Housing Agency canceled the project, but Rivero has not returned the money. (Al Diaz/Miami Herald) $1 million: 1680 NW 39th St. The Housing Agency paid the Allapattah Business Develop-ment Authority $1 million to finance the construction of 30 homes for the low-income. The group has repeatedly post-poned construction due dates. (Peter Andrew Bosch/Miami Herald) $3 million: 940 SW 29th St. In 2001, Miami-Dade ccommissioners opted to lease land at Smathers Plaza public housing to the MDHA Development Corp. and later awarded the group $3 million. The plan was to develop and operate a 105-unit assisted-living facility for low-income elderly. But the project has stalled for years, with only the existing Smathers Plaza standing on the site. (Peter Andrew Bosch/Miami Herald) $500,000: 1497 W. Flagler St. The Miami-Dade Housing Agency approved a total of $500,000 to the Model Housing Cooperative to build the 32-unit Villas Dr. Godnoy. The project was supposed to be done by 2003. To date, it's still only 75 percent complete. (Peter Andrew Bosch/Miami Herald) $1 million: 1800 SW 8th St. Troubled developer Oscar Rivero was awarded $1 million in 2006 to build 54 units called 1800 Condos. He got the money even though two of his previous affordable housing projects died, costing taxpayers $1.6 million. Earlier this year, Rivero relinquished the $1 million. The lot is still empty. (Al Diaz/Miami Herald) $1 million: 500 NW 36 St. The Housing Agency paid Pinnacle Housing $1 million to build the 179-unit Los Suenos Apartments. The developer has post-poned construction deadlines and the project is months behind schedule. (Carl Juste / Miami Herald) $1 million: 240 N. Miami Ave. In 2005, the Housing Agency awarded $1 million to Miami Downtown Developers, a team that includes Alben Duffie. His wife is an administrator at the Housing Agency, and Duffie runs a nonprofit group that was advanced millions of dollars for affordable housing projects.The Housing Agency recouped the money in April. Nothing was ever built. (Carl Juste/Miami Herald) $2 million: 2415 NW 16th Rd. The Housing Agency gave Enterprise Community Develop-ment Corporation $2 million beginning in 2003 to build River Run South Apartments with 174 units. Three years later, the building is still only 80 percent complete. (Carl Juste/Miami Herald) $1 million: 5896 SW 68th St. In 2005, the Housing Agency awarded developer Oscar Rivero $1 million for a proposed 46-unit housing complex in South Miami. Rivero got the money even though he had been paid $1.6 million already for two other affordable housing projects that are now dead. So far, nothing has been built. The Housing Agency earlier this year recouped the $1 million. (Carl Juste/Miami Herald) $940,000: 1882 NW 70th St. The Housing Agency loaned developer Reynaldo Diaz, with the Infill Development Group, $940,000 in 2002 to build sev-eral dozen houses on vacant inner-city lots. Four years later, most of the lots are still vacant and Diaz has yet to repay the Housing Agency loan, which is in default. On NW 70th Street, homeowners use the vacant lot to park their cars. (Carl Juste/Miami Herald) $816,000: 2300 NW 7th St. Developer Oscar Rivero pocketed $816,000 from the Housing Agency to build 54 homes for the poor. But nothing was ever built. Now, the lot is used as a parking lot; a construction com-pany uses it to hose down cement trucks. Rivero has never repaid the money.

Staff writer Susannah Nesmith and database editor Tim Henderson contributed to this report.