The Profit in Decay

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Wrong Side of Renewal

In recent years, landlords in the District have emptied hundreds of apartment buildings and taken steps to convert them to condominiums. Tenants say they have been pushed out, sometimes by bad building conditions. Landlords say they have tenants offered move-out offers, and that tenants often report frivolous code violations for leverage in negotiations.

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By 2005, however, the 81-unit complex was run-down and dangerous, with just 18 families left. Evans started wedging steel wool into holes in the floors to keep the mice out. She made up stories when her son asked about the prostitutes and drug dealers who roamed the buildings, gaining access through unlocked doors.

In September 2005, the owner sold the property, giving the remaining tenants fresh hope that a new landlord would finally fix up the complex and rent vacant apartments.

They were wrong.

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The new owner was a company controlled by Litman and Steven Madeoy, who were among more than 30 people convicted in the late 1980s of fraudulent property deals that cost taxpayers hundreds of millions of dollars. Madeoy served 2 1/2 years in a federal correctional institution in Virginia; Litman served seven months in a halfway house.

Soon after buying the property for $4.8 million, Madeoy, Litman and a third partner began advertising the complex in fliers as condominiums, with two bedrooms selling for $185,000. Evans, a single mother, didn't see how she could afford the mortgage on a $34,000 annual salary.

The owners offered tenants condominiums at reduced prices, the option to remain as renters or a move-out payment. But tenants worried that they couldn't afford even the lowered prices and that the offers were vague and wouldn't begin to cover the cost of giving up a rent-controlled apartment.

In the meantime, they tried to fix up the buildings themselves. Tangela Garnett, a Department of Labor secretary, used bleach to scrub hallways in her unsecured building after vagrants left condoms, feces and syringes on the floor.

By late 2005, just seven families were left.

"People just get tired of living in a place where conditions are so bad," said the tenants' attorney, Julie Becker of the Legal Aid Society of the District of Columbia.

In November of that year, the owners submitted through their attorney an application to DCRA claiming that the buildings were "entirely vacant" and that "none of the original tenants was requested, ordered or coerced to vacate and surrender his or her unit."

But the complex was not vacant; the landlords were still negotiating with the remaining tenants. Two days after submitting the application, Litman e-mailed Becker and others about an upcoming tenants' meeting, saying, "I would also like to add to the agenda a conversation about condo conversions."