Sayles Away
HUD should let the residents of a Southeast D.C. cooperative keep their homes.

Wednesday, May 23, 2007

THE RESIDENTS of Sayles Place Homes in Southeast Washington want to keep their homes. But yesterday, the U.S. Department of Housing and Urban Development, which backed Sayles Place's mortgage, said it plans to foreclose and sell the property to the highest bidder on June 15.

The agency is foreclosing on Sayles Place not because the residents' cooperative is behind in its bills -- it is fully up to date -- but because it is in "technical default." HUD senior spokesman Jereon M. Brown says that the property has failed six out of the past seven maintenance inspections and that HUD is selling the property because it is concerned about the safety of the building. But the cooperative disputes the accuracy of the most recent inspection. Mary Charles, president of the co-op, notes that the inspector took off points for the accessibility of rooms and downspouts that have not been in use for years, including one laundry room that never even existed. Yesterday, HUD denied the co-op's appeal of this inspection.

The residents, who are poor and mostly black, fear they will soon be displaced from their homes. While the foreclosure contract requires the property to remain "affordable housing" for the next 20 years, it also allows the new property owner to charge a higher rent to new tenants. This provision gives a new owner incentive to muscle out the existing residents.

After years of fighting with HUD, last spring the cooperative offered to pay the outstanding balance on the mortgage (seven years early) and to completely renovate the property to the tune of $4 million, for which, residents say, they had already secured an architect, contractor and financing. This would address any outstanding maintenance concerns about the building and provide more than three times the funding that HUD would require a new owner to provide in renovations. It would remove HUD's responsibility for the property, too.

Last year the agency rejected this offer without explanation. At this point, HUD should accept the Sayles Place residents' proposal and allow them full control, and complete renovations, of their own homes.