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Fund Gives Tenants Little Relief
This apartment building where tenants lived with no heat received $626 from a city repair fund.

By Debbie Cenziper and Sarah Cohen
Washington Post Staff Writers
Sunday, May 4, 2008

In December 2006, with temperatures hovering at 30 degrees, tenants in a crumbling brick building on Kennedy Street NW called the city with an urgent appeal. The heat was out, and they were cold and miserable. For months, they had lodged complaints, while city inspectors documented wet ceilings, broken lights, cracked walls, leaking sinks and defective radiators.

The District's Department of Consumer and Regulatory Affairs has a lifeline for tenants living in dangerous conditions: a multimillion-dollar fund to repair buildings when owners refuse to do the work.

But in a city vexed by dozens of distressed buildings, DCRA has rarely intervened. In the past three years, the agency spent $617,000 on repairs at neglected apartment buildings -- just 4 percent of the $16.5 million in the fund -- even while its inspectors chronicled rampant code violations at complexes across the city, The Washington Post found.

At 809 Kennedy St. NW, DCRA put oil in the boiler but left the other breakdowns uncorrected. Over three years, records show, the agency kicked in $626 from the repair fund to one of the most troubled buildings in the city.

"This fund is the difference between safe and habitable housing and housing that no one should live in," said Natalie LeBeau, an advocate with the nonprofit Housing Counseling Services, who worked with the families on Kennedy Street. "But the fund is largely inaccessible."

Instead of investing in apartment buildings, DCRA in the past three years spent $440,000 to support a computer system the agency acknowledges is largely unreliable and $2.2 million on the development of a new one. An additional $2 million went to pay support staff, such as inspectors, researchers and schedulers, even though the agency has another fund flush with millions of dollars to cover operating expenses.

DCRA spent almost $1.6 million from the fund on repairs at single-family houses, some valued at $500,000 or more, including a sprawling house on Decatur Street NW that received a new front porch, 25 windows, fresh paint, roof repairs and a garage door. Millions more went to school buses and police and fire department equipment.

At the time, the District's real estate market was booming, and landlords in thriving neighborhoods were pushing to convert rent-controlled apartments into pricey condominiums. In dozens of cases, tenants said property owners had allowed buildings to deteriorate to force them out. DCRA's enforcement was falling short, with delayed inspections, poor follow-up and spotty efforts to pursue fines against negligent landlords.

From 2004 to 2007, landlords emptied more than 200 buildings, generating more than $328 million in condominium sales.

The Kennedy Street building is now vacant. DCRA had stepped in to help with the heat after advocates and D.C. Council members complained. The agency made minor fixes and spent about $4,000 from another account on the heating oil. But every family moved out within months.

Richard Deeds, whose company owns the building, said he paid families thousands of dollars to leave and is preparing to tear down the complex to build 70 apartments, with rents starting at $900 a month. He said that the building was old and could not be rehabilitated, and that tenants complained to the city to gain leverage for buyout payments.

"That's all of them trying to get money out of me," he said.

LeBeau said many tenants had lived there for years and wanted to stay. Rents were low, with one tenant paying $300 a month. LeBeau said families decided to move because they feared that DCRA would not force the landlord to maintain the building or use the city fund for extensive repairs.

"Tenants don't know what the city has done with this fund," she said.

The District, with some of the strongest tenant-protection laws in the country, created the repair fund in 2001. When DCRA finds housing code violations and owners refuse to correct them, the agency decides whether to use the fund to make repairs. If work is done, DCRA imposes liens on properties or a special assessment on owners' tax bills, both of which would accrue interest until the money is repaid.

DCRA Director Linda Argo, appointed in mid-2007, acknowledged that the fund operated for years without formal guidelines. She called the agency's oversight of the fund "sloppy" and said DCRA has removed several administrators in charge of the fund. She also has strengthened the city's efforts to get property owners to repay the money.

But Argo said the city has to pick repair projects carefully so the money doesn't run out. "If we used the fund to repair every door or window we were asked to, the fund would be depleted in a matter of weeks or months," she said. "We are being more aggressive with this fund, but we can't blow the entire fund on just a few projects."

Most years, however, DCRA has allowed millions of dollars to sit untapped even as the city pumped an average of $5.3 million annually into the fund. In 2003, DCRA left $6.4 million unspent; in 2004, $3.5 million. The money piled up, rolling over year after year.

By 2005, records show, the fund topped $11.5 million. Then-Mayor Anthony A. Williams stepped in, redirecting $7.3 million to pay for new school buses and equipment for the police and fire departments, records show.

"There's a dramatic disconnect between the great need for these repairs and the amount of money that DCRA is spending," said council member Mary M. Cheh (D-Ward 3), who leads a committee trying to determine what went wrong and has demanded a full accounting of the fund. "This is nothing short of a mess."

The 48 apartment complexes most often cited for bad conditions, accumulating more than 16,400 housing code violations in recent years, have received a total of $210,000 in repairs since 2005, a Post analysis found. The city spent 13 times that amount on repairs to single-family homes, vacant properties and less-troubled apartments.

The building with the highest count of code violations in the city -- an 85-unit complex in Mount Pleasant that burned down in March -- received $56,500 worth of repairs from DCRA over three years, records show.

At a complex on Ontario Road NW owned by the same company as the Mount Pleasant building, NWJ Cos. of Philadelphia, advisory neighborhood commissioner Bryan Weaver said he and others spent eight months urging DCRA to use the repair fund.

The complex had been cited for hundreds of violations, with residents complaining that a retaining wall had collapsed, blocking the back entrance to one of the buildings; doors and windows were broken; and fire alarms and extinguishers were in short supply. Squatters were breaking in, bunking in stairwells and landings.

Weaver said DCRA made repairs only after he and others helped tenants paint the hallways. DCRA spent $3,200 to fix doors, but Weaver said the building still needs work.

"I had this idea that DCRA was going to come up, sort of the cavalry on the hill, riding in as a regulatory cowboy and doing a bunch of work in the building, then making NWJ foot the bill," Weaver said. "But it was very minimal stuff. And it took months."'

NWJ Vice President Eric Kretschman said the company is spending $500,000 to rehabilitate the complex. NWJ has worked hard to maintain the complex, he said, but some damage was caused by problem tenants. He added that DCRA's repairs were overpriced and that NWJ was willing to do the work itself.

"It took them three days to do it," Kretschman said. "It should have taken 45 minutes."

DCRA denied that the repairs were overpriced.

Although apartment complexes drew little attention, some single-family homes received extensive repairs, usually triggered by complaints from neighbors about unsafe or unsanitary conditions.

The house on Decatur Street NW, assessed at $907,000, received $85,500 from the DCRA fund in 2004. Property records show that the home is owned by the late Eleanor G. Lee. Family members occupy it, one relative said. Another relative said she did not know why the city made repairs. The money has not been repaid.

In 2005, DCRA spent $9,000 on a house on 16th Street NW valued at $1 million and owned by professor Amy Mazur and her physician husband, Joseph Liberman. Liberman said he and his wife rent out the house and were unaware of complaints about its condition. He said they were willing to fix the problems themselves. They repaid the money.

Almost $50,000 went to a house on 19th Street NW, assessed at $618,000 and co-owned by physician David Newsome. Newsome, who has not repaid the city, did not return calls seeking comment.

City money also went to property owners with extensive real estate holdings, including Montgomery County physician Lisa Godette. In late 2004 and early 2005, DCRA spent $23,000 making repairs and removing trash at a property on G Street NE, one of six properties she owned at the time. Godette repaid the money with interest in November 2005. That month, she sold the property for $460,000, almost seven times what she paid for it in 2002.

On 11th Street NW, DCRA spent $33,000 last year fixing the gutters, bricks and roof of a property owned by Carlos Miranda. Records show the Montgomery County resident owns six other properties, including a house in Potomac that he bought in 2004 for $1 million. Miranda repaid the city with interest in January.

Godette and Miranda could not be reached for comment.

Argo said that there are many rental houses in the District and that DCRA has a responsibility to make repairs at those properties. She also said that the agency uses the fund at owner-occupied homes largely for problems that affect adjacent buildings or the public.

Housing advocates and government leaders, however, say that even temporarily subsidizing homeowners who allow their properties to fall apart is a poor use of public money when thousands are living in buildings without heat, hot water, electricity or working appliances.

"It has been infuriating to watch this when there are so many great needs in the city," said council member Jim Graham (D-Ward 1). "These dollars are scarce, and we have so many multi-family buildings that are in dire need of repairs. That should be the number one priority."

DCRA officials say that for years, the fund was controlled by longtime administrator James Aldridge, who decided where and when to spend the money. Aldridge was fired in January 2007, agency officials said. Aldridge did not return calls last week seeking comment about his dismissal.

In an interview late last month, he said inspectors from another DCRA department decided which cases to forward for repairs, and Aldridge said he followed through every time. He said he questioned why so few cases were recommended, particularly at distressed apartment complexes.

"The reality is a lot of stuff just never came in," he said. "We were begging to [repair] large buildings."

At 3339 10th Pl. SE, tenants have repeatedly complained about rats, lack of heat, collapsed ceilings, bad smells and other hazards. Owner Edward Knott said in an interview two months ago that he has maintained the building but wants to sell it.

DCRA made repairs in 2005, records show, but didn't step in again until March. After being contacted by a Post reporter, the agency sent inspectors. They found 2 tons of raw sewage on the basement floor, plumbing leaks, a broken fire alarm and a clogged main sewer line.

DCRA made a series of fixes, including replacing the hot water heater. But tenants' attorney Rebecca Lindhurst, with the nonprofit Bread for the City, said more work is needed. An entire ceiling is missing in one apartment, the heating system doesn't work, and the electricity is spotty, she said.

"What's the point of having a repair fund," she said, "if you don't use it for repairs?"

Staff researcher Meg Smith contributed to this report.

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