Privatized housing company coughs up $1.1 billion for renovations amid military family lawsuits

The Army announced on Wednesday a major financial investment in its privatized housing on six installations by Lendlease, one of the largest privatized housing providers for the service and a company that has been the subject of at least two lawsuits from military families.

Lendlease, which owns and operates over 26,000 Army homes, secured a $1.1 billion capital investment from public financial institutions to “accelerate significant improvements” to 12,000 homes across Fort Hood, Fort Campbell, Fort Knox, Fort Wainwright, Fort Drum, and in Oahu, according to an Army press release. It will also allow for the construction 1,200 new homes at Hood, Campbell, Knox, and Wainwright.

Gen. Ed Daly, commander of Army Materiel Command, said in the press release that the investment is “an extraordinary milestone with Lendlease,” and that it will “go a long way in improving the quality of homes for soldiers and their families.”

“Lendlease is proud to be a trusted partner of the Army and the U.S. Department of Defense,” Lendlease CEO Denis Hickey said in a separate press release. “We stand committed, alongside our Army partners, to continue improving the quality of life for service members and their families now and into the future.”

While $1.1 billion is certainly no small amount, the press releases left out some important context: Lendlease has been the target of at least two lawsuits from military families in the last year, been called to testify before Congress for alleged malpractice, and was one of six companies who failed to receive an average satisfaction score “at or above neutral” in a resident survey last year.

In June, nine military families filed a lawsuit against Fort Hood Family Housing, which is run by Lendlease, alleging severe mold in their homes that resulted in lasting health problems for them and their children.

“Despite clear evidence of dangerous mold and its catastrophic health consequences, Defendants refuse to admit the truth regarding the severity of the problems in the housing for which they are responsible,” the complaint said.

In September, three Marine Corps families at Camp Lejeune, N.C. filed a lawsuit against Atlantic Marine Corps Communities Property Management LLC, which is run by Lendlease. The families alleged that their landlords ignored mold, insect infestations, and faulty plumbing.

The Army’s press release on Wednesday said Fort Hood would receive “a significant portion of the total investment,” and Fort Hood Commander Lt. Gen. Pat White said in a statement that the work at the Texas installation would begin this summer.

Stephanie Murphy, a Lendlease spokeswoman, told Task & Purpose the investment was not related to the pending lawsuits and “has always been part of our improvement strategy for the inventory.”

Lendlease is by no means the only privatized housing provider to receive intense criticism from military families and lawmakers over substandard housing, since a 2018 Reuters series blew the lid off of a systemic problem across military installations. Executives from other companies, including Corvias, Lincoln, Hunt, and Balfour Beatty have also been called to testify before Congress about their failure to take care of families over the years.

“Essentially, this system was set up as a gravy train for each of your companies, for all of the companies, that have benefited and put money — millions and millions of dollars — in your pockets and profit,” Rep. Debbie Wasserman Schultz (D-Fla.) told executives during a hearing last spring. “But that occurred without a way for military families to hold you accountable because of the way the contracts are structured.”

Another effort to improve privatized housing which resulted from the Reuters series still doesn’t appear to have come to fruition; the Tenant Bill of Rights, which was released last February by then-Secretary of Defense Mark Esper, was still missing four critical pieces in September — the rights to common documents, withholding rent until disputes are resolved, for tenants to receive a home’s maintenance history before moving in, and a process for dispute resolution.

Defense officials told Task & Purpose on Thursday that the Defense Department has been working with the privatized companies on those four remaining rights, and that based on ongoing discussions they expect them to be available “at the majority of vast installations” by June 2021.

Featured photo: Sgt. 1st Class Jesus Joseph Brown, who joined eight other military families in suing Lendlease at Fort Hood, inspecting mold in his home. (Photo via Pulman, Cappuccio & Pullen, LLP)