Tax dollars keep flowing to landlord, D.C. is suing over housing conditions
WASHINGTON: The District has for years subsidised substandard housing owned by one of the city’s most controversial landlords, despite evidence of wretched conditions and official promises to ensure safe dwellings in US’ capital.
Over the past eight years, District officials have issued more than 200 warnings for housing code violations at apartment complexes owned by Sanford Capital, charging the company more than US$150,000 (RM675,000) in fines - about a third of which have gone unpaid.
Yet the city has continued to boost Sanford’s bottom line, funnelling millions in tax dollars to the company annually to subsidise rent for the poor and formerly homeless residents living in its 19 apartment buildings, concentrated around Ward 7 and Ward 8.
City officials say they have no choice because the supply of affordable housing is so limited.
“As a bad actor, I don’t want them to benefit from everyone’s tax dollars that’s collected in this community. I don’t think that’s fair,” said D.C. Council member Anita Bonds, who chairs the council committee that oversees housing. She pledged a year ago that the city would stop sending subsidies to Sanford. “But we have to find some other locations that would work with government and be willing to accept the government process for housing people, and that’s not always easy.”
LaTonya Johnson was living in a Quality Inn at taxpayer expense until she found a Sanford apartment at an orientation for housing voucher recipients. Her unit failed pre-inspection by the city twice before it was approved and she moved in, only to deal with intermittent gas, a leaky ceiling and rats on her balcony, she said.
“They know we homeless,” said Johnson, who lives in the apartment with her two sons. “So they rush us up in these apartments, and they are falling apart.”
D.C. Mayor Muriel Bowser, D, who campaigned on a commitment to safe, affordable housing, declined several requests to discuss Sanford or the city’s oversight of rental properties that receive public subsidies.
Laura Zeilinger, director of the District Department of Human Services that oversees homeless programmes, said she felt that her hands were tied because of the District’s affordable-housing shortage. Sanford owns 1,300 units.
“When you have somebody who controls a large portion of the affordable housing in the city and we have a problem with them, there’s no way that we can say we are never working with that company again,” Zeilinger said.
Out of frustration, D.C. Attorney General Karl Racine, D, took the rare step last year of suing Sanford - the first of two lawsuits he has filed alleging that the company has failed to fix chronic problems such as rodent infestation and mold at two properties.
“You can’t tolerate lack of compliance with the law because you feel as though there won’t be enough people to provide the service,” said Racine, the District’s first elected attorney general.
City officials say at least 170 previously homeless families and an additional 235 individuals were living in Sanford properties using housing vouchers in 2016 - providing Sanford millions of local and federal taxpayer dollars.
Patrick Strauss and A. Carter Nowell, who together launched Sanford Capital in 2005, declined repeated requests to discuss their business. Their attorney, Stephen Hessler, has said the company has been a responsible manager of its properties and made adjustments when necessary. In court filings, the company has blamed tenants for causing damage and for withholding rent payments that could fund repairs.
Bowser is not unacquainted with Sanford. The company gave US$3,000 to her 2014 campaign for mayor and Strauss’ wife, Mary, gave an additional US$753 to Bowser’s bid, according to campaign finance reports.
Washington’s two-decade-long building boom has attracted investors of all stripes, among them sovereign wealth funds, pension mangers and wealthy individuals from around the world.
Much of that investment has resulted in the shiny new office buildings, restaurants, hotels and apartment towers that have remade Washington.
In 2005, the market also attracted Strauss and Nowell, whose began buying properties in mostly black, low-income neighbourhoods.
Strauss had dabbled in other businesses. In 2008, three investors sued him, two members of his family and other associates, saying they had been defrauded after they gave hundreds of thousands of dollars to pension and employee benefit businesses run by Strauss, according to court records. Strauss denied any wrong doing and a D.C. Superior Court judge ruled in his favour in 2013.
While that case was pending, two other Strauss companies were accused by the US Department of Justice of allegedly bilking investors in a tax-shelter scam in which they offered financial stakes in nonexistent cemeteries in Virginia and New York. Strauss and his father, Michael, admitted no wrong-doing but signed a permanent injunction ordering them to close the businesses and notify the alleged victims of the court ruling.
In the rental real estate world, when tenants vacate, owners typically freshen the units and try to quickly rent them again.
At Sanford properties visited by The Washington Post, however, empty units were boarded up to sit vacant; in some buildings, there were just a handful of occupied apartments tucked between swaths of dark, abandoned units. At Terrace Manor, just 14 units of 61 units were occupied in the fall.
“This is the sorriest place I’ve ever lived in,” said Mary Mason, a 64-year-old resident of Martin’s View Apartments. Mason has been calling Sanford about faulty hot water and heat and leaking ceilings since the company bought her building in 2013. Her complaints go to voice mail, she said. “I wish I could find something better, but I’m just going to try to fight. The only reason I’m here is because of the rent.”
Tenants of Sanford buildings said they knew little about the men who own their buildings.
Fed up with what she said were repeated failures by the rental office to respond to complaints about her unheated apartment in January 2016, Mary Shuler tried to take her pleas directly to management.
The 50-year-old tenant hitched a ride with a neighbor to Bethesda, Maryland, where Sanford is headquartered in an office building.
In the lobby, Shuler, who is blind in one eye, demanded to speak to a supervisor. A receptionist left for a few minutes and returned with a promise that Shuler wouldn’t spend the winter without heat.
“She said someone was going to come that day, but nobody ever came,” said Shuler as she ran her oven with its door open on a recent morning. “I called again. And they said someone would come. But nobody came.” — WP-Bloomberg