The City Takes on a Slumlord
DC Attorney General Karl Racine and Mayor Muriel Bowser have become embroiled in an intense and heated battle with Sanford Capital and its subsidiaries Terrace Manor LLC and Oakmont Management Group LLC. This major landlord, headed by Aubrey Nowell Carter, has built its DC business renting to low-income residents. Its apartments are substandard and some even lack heating or air-conditioning. In others, inspections have uncovered sewage leaking from the ceiling while rodents scurried through holes in walls or doors.
The Mayor Joins the AG
Racine filed two lawsuits in 2016 demanding immediate repair of Sanford properties in Congress Heights and the 11-building, 61-unit Terrace Manor, also in Ward 8. As East of the River first reported, the AG also decided to deploy the city’s Consumer Protections Act to seek reimbursement of rents paid at Terrace Manor over the past two years. Bowser recently joined the fight after published reports indicated that housing vouchers were financing hundreds of the company’s deteriorating units.
That kind of battering would sway the average landlord to do the right thing. Maryland-based Sanford Capital has been unfazed, however.
Racine asked DC Superior Court Judge John M. Mott last month to hold Sanford and its partners in contempt in the Terrace Manor case. In his filing Racine also requested the appointment of a receiver with “the expertise to develop and supervise a viable financial and repair plan for the satisfactory rehabilitation of Terrace Manor Apartments.” He noted that Sanford had failed to make emergency repairs cited by the inspectors within the required 24 hours, as agreed in an earlier court-approved abatement plan. Sanford even blocked the entry of an inspector into one of the apartment buildings.
Sanford’s defiance is breathtaking. In one instance, court-approved inspector Michael Lampro discovered a burst pipe in the basement at 3373 23rd St. SE. Entering the basement, he saw mold covering the walls and ceilings and approximately an inch of standing water. A broken pipe “with a green secretion dangling from the ruptured end” was the source of the problem, Racine recounted in court documents.
When Lampro reported the problem, Carter disputed the finding. The inspector promised to return, hoping the necessary repair would be made. That was on Feb. 22, 2017. Lampro returned on March 1 and found no improvement. Not until March 21 did Carter finally have the pipe repaired, stated the AG. Sanford Capital “has proven that it is unwilling or unable to live up to the minimum duties of any landlord,” stated Racine. “We will hold Sanford accountable under the law.”
Stephen Hessler, Sanford’s attorney who helped negotiate the Terrace Manor repair plan, could not be reached for comment. Sanford, however, has filed its own lawsuit against the District, charging that actions by the Department of Housing and Community Development (DHCD) prevented it from securing the financing needed to make repairs at the Southeast property. That doesn’t explain why Sanford violated the housing code at several other apartment complexes east of the Anacostia River.
Racine said Sanford’s lawsuit is “superseded by the abatement agreement they reached with us.” For all practical purposes the counterclaim is “moot.”
Speaking at her annual state of the District address, Bowser said she was “horrified” when she read about the conditions at Sanford-owned properties, specifically those where tenants use housing vouchers to guarantee payment of their rent. She said if the company doesn’t fix the properties, the city will see them in court.
Bowser, Racine, and Council Chair Phil Mendelson met about Sanford before she delivered that speech. Racine said he urged them to “coordinate and collaborate on a long-term policy to deter conduct like that in the Sanford case.” He has not ruled out taking additional legal action against the company. “All options are on the table.”
“Maybe when we have repeat offenders we may want to lock them up,” said At-large Councilmember Anita Bonds, who heads the Committee on Housing and Neighborhood Development. Bonds was instrumental in the AG’s decision to file the first lawsuit last year against Sanford Capital, related to property on Alabama Avenue SE in Congress Heights. Bonds has worked to secure Council approval of additional authority so Racine can recover rents paid by tenants at Terrace Manor, including those who moved out in search of safer housing.
Too Little, Too Late?
The casual observer might conclude that the government is on top of the problem with slum landlords and other housing-related issues. Properly assessed, however, the Sanford case may be too little, too late.
“I don’t think you can ever do anything too late to make sure people aren’t living in hazardous property,” countered At-large Councilmember Elissa Silverman during a recent interview with East of the River. “The question we have to ask is, are we approaching this in a proactive way instead of a reactive way,” continued Silverman, who is a member of the Committee on Housing and Neighborhood Revitalization.
The partial answer to that question can only be the latter.
Bonds cited delays in getting the city, particularly DHCD, to act quickly in helping residents at the Sanford-owned property near the Congress Heights Metro station. “We went out to that property on Alabama Avenue, and Polly Donaldson [DHCD’s director] was there. At that time there was no strong commitment from her,” continued Bonds, noting that three months later the director still had not decided the direction her agency would take to help tenants. 90 days after that, DHCD decided to auction an adjacent building not owned by Sanford. This action threatens to inflate the value of the tenants’ property, which they are now trying to purchase. Bonds added, “It seems we may have all these tools but we take a heck of a long time to utilize them.”
Until the AG stepped in, renters at Sanford properties had been begging agencies for help. The Department of Consumer and Regulatory Affairs (DCRA) had conducted inspections but not taken any aggressive legal action. While it has a fund to help mitigate violations when landlords are slow to make critical repairs, none of that money had gone to tenants at Sanford properties. DCRA officials said the fund is too meager. To date, however, they haven’t requested to increase the amount available, as reported in the December edition of East of the River.
Racine said DC needs more inspectors and that he was “pleased” to see the mayor allocate additional funds for that purpose. “The city should do what it takes to implement a process that more efficiently and effectively imposes and collects fines from slumlords.” He added, “I share Chairman Mendelson’s interest in enacting a clean-hands requirement that would deny landlords who have been found to have repeatedly violated DC laws the privilege of receiving government subsidies.”
Not only should there be more inspectors, said Bonds, “the government should hire more with specific expertise.” When a pipe bursts, for example, someone from the city would not just order the repair but would examine the work to ensure it is well-done and permanent.
Often tenants, including those at Terrace Manor, have been forced to endure slum like conditions for fear that they would be unable to find something at a comparable rent. Bowser and other officials have made constructing and preserving affordable housing a prime directive of the government.
Silverman in a letter to Bowser earlier this year asked for allocation of more money for preservation in the Housing Production Trust Fund. Money is not the problem, however. Consider that one of the recommendations made by the mayor’s Housing Preservation Strike Force was the creation of a preservation division within the DHCD. Said Silverman, “We need a nimble group of people who could look at the housing stock and develop a strategic plan on how to preserve affordable units.”
Nothing is stopping the administration from reaching that goal. After all, $10 million already has been set aside for the DHCD preservation division. The agency just hasn’t seen fit to establish it. It also hasn’t made operational the District Opportunity to Purchase Act (DOPA), which was passed more than a decade ago. That law, said Silverman, could be used to serve as a “pause button.” When tenants aren’t able to exercise their right to purchase the building, the city could “step in and sign a contract with the seller and then look for a nonprofit developer,” she said.
That underscores Bonds’ comment about the District having sufficient programs to address tenant problems. So why hasn’t it been able to coordinate its actions and use the resources more actively to protect vulnerable low-income tenants? “It’s a great question,” responded Silverman. “It’s one that wears me down, quite honestly.”
jonetta rose barras is a DC-based freelance writer; she blogs at jonettarosebarras.com.