Landlords or Slumlords: Cities Fighting Back

Slumlords take advantage of legal procedures for evictions while ignoring codes that require proper maintenance endangering tenants. Today we look at slumlords in several major cities to help illustrate where greater tenant advocacy is needed. 

By Rebecca Martin

New York Slumlords

In the 2000’s,  gentrification pioneers and business partners, Loretta Gendville and Gennaro Brooks-Church, made money by acquiring properties in the Brooklyn area and turning them into Air BNBs and sometimes illegally converted rentals. According to an investigation by New York, they were described as “negligent landlords who responded to complaints with hostility and threats.” The story of their troubles with the city began when the tenants of the run-down four-story house they rented out as nine illegal units suddenly found themselves faced with a Covid Lockdown eviction.

Slumlords

Modern slumlords don’t look the way we picture them, resembling Wall Street types more than shady characters from a 19th century film.

In early July, the tenants were surprised by the property owner’s, Brooks-Church and Gendville, appearance on the property appearing to be in the act of moving in. Tenants, many of whom had lost their jobs during Covid, were unceremoniously ousted from the property with threats to “get the fuck out”. After calling 911, tenants quickly gathered belongings and found themselves on the street. When the police arrived, responding to the owners’ call, the tenants were informed there was nothing they could do as they were not the owners of the property. Their only option was to share the home with the owners who were even then making themselves at home in the rental units.

An anti-gentrification group was contacted and an urgent protest was organized. This led to civil lawsuits from the city.

“For those in their orbit, their public cruelty at 1214 Dean Street was not an isolated moment of madness but the inevitable culmination of years of greed and exploitation, exacerbated by the pandemic, in which even those who staked a claim in the Brooklyn boom are finding themselves unable to survive the bust.” https://www.thecut.com/2020/08/1214-dean-street-brooklyn-landlords.html

The couple had made their fortunes in “green businesses” and touting eco-improvement to the area. Despite their rise to success, their property management style left much to be desired and signs were posted that read Do Not Let Anyone From the City In, No Exceptions. The majority of tenants were minority, gay or low income renters.

This is a growing problem in cities which have a housing market which encourages  investors  to put money into real estate with minimum down payments, while developers concentrate on low density luxury housing, according to The Cut. Investors, in turn, were hit hard by Covid, which finally brought these types of properties into the limelight and resulted in a lawsuit being filed by the City of New York against Gendville and Brooks-Church. And these investors are not an anomaly in urban housing markets.

Modern slumlords are different than we picture them. Savvy investors see financial opportunities in these illegal rentals. The business plan features very little expenditure, maintenance or know how. The goal is turning these properties to profit in a market where the need for housing is urgent in particular segments of the population. The act of acquiring the next property overshadows an interest in property integrity.

We can then see where needed maintenance and repairs in rental properties, particularly those outside the grid, gets lost. And public safety concerns become almost non-existent.

Chicago Slumlords

In 1994, an ordinance was passed in Chicago after a three-year campaign by then City Clerk James J. Laski following the deaths of 10 people in his ward. Jesus and Gracia Orejel and their eight children perished due to a furnace malfunction which resulted in toxic levels of carbon monoxide. The new ordinance required carbon monoxide detectors placed within 40 feet of all sleeping areas in units with a fuel burning appliance or furnace. Chicago was the first major city to pass such an ordinance.

slumlords must be regulated

Chicago’s efforts to crack down on slumlords includes this website where problem landlords are brought to the public’s attention. https://www.chicago.gov/city/en/depts/bldgs/supp_info/building-code-scofflaw-list.html

In Chicago in 2000, the deaths of a young mother and her two daughters due to carbon monoxide poisoning in one of the buildings owned by Saloman and Maria Guzman prompted a unique legal settlement. This story began in the summer of 1999 when the Robb family moved into a small first-floor apartment of a building owned by the Guzman’s. The city of Chicago had begun requiring carbon monoxide detectors in 1994 but the apartment lacked carbon monoxide detectors.

A wrongful death lawsuit was filed by Robb’s brother, based on the absence or malfunction of carbon monoxide detectors. It was also alleged that carbon monoxide detectors were installed following the deaths. Their lawyer was quoted:

“They had bought some properties and he was doing the best he could,” Sanan said. “He was working on his buildings all the time.” https://www.chicagotribune.com/news/ct-xpm-2000-12-16-0012160186-story.html

Following the deaths, all seven of the Guzman’s properties were inspected and 400 code violations were found. Prior to this time no code violations were issued. A Housing Court lawyer found that traditional prosecution fell short. It would levy fines or orders to repair the property. Instead an agreement was reached which required the owners to sell their seven properties and forbid them from owning or managing rental properties again in the city of Chicago.

Was this the case of “hardworking” hands on investors scrambling to do all the maintenance themselves, or a system too tolerant with insufficient inspections and ineffective deterrents to code violations all contributing to a deadly outcome. These were legal units operated in a haphazard way which flew under the city’s radar. And the city admits that is a difficult condition to monitor. But they agreed to not pursue a criminal case under the agreement.

One possible source of the carbon monoxide was a malfunctioning wall heater located in the apartment. This tiny apartment became a death trap which took the lives of a young hardworking mother and her two children.[1] We have previously talked about studies showing that single mothers with children are often at risk of owner negligence.

Laws were strengthened as a result of these deaths; requiring carbon monoxide detectors be installed 15 feet from any sleeping area.

In 2013, an incident occurred in an apartment building in which no carbon monoxide was detected at the scene by first responders. When the victims’ conditions worsened in the hospital a second check was done which revealed higher levels of carbon monoxide. Though the levels were still “low” a call was made to the gas company.  This incident was written off as being due to “low-dose, long-term exposure”.  Even though one person was found in cardiac arrest at the scene and another was found suffering from seizures.[2] Two people died in this incident while a third adult and four children were also treated. The complex was found to have inadequate carbon monoxide detectors. https://www.nbcchicago.com/local/2-dead-after-apparent-carbon-monoxide-leak/1961928/

This leads to the story we covered in the previous blog in which two women died in a basement apartment this year in Chicago while four others on the floor above were taken to the hospital for treatment. Fire officials in this case noted that there were not working carbon monoxide detectors on every level of the home. The carbon monoxide level was 20 times higher than what is considered safe.

World Health Organization Calls for Change

According to the World Health Organization, both indoor and outdoor exposure has grown in the past 16 years. 7 million premature deaths worldwide can be attributed to air pollution. Air pollution and climate change are the two biggest threats to human health according to the World Health Organization. Despite this awareness, their continues to be a  reluctance to aggressively pursue measures to alert renters to the dangers they might face from life threatening levels of carbon monoxide in their homes. Continued reluctance to pursue landlords for violations makes the problem that much more serious. https://www.who.int/news/item/22-09-2021-new-who-global-air-quality-guidelines-aim-to-save-millions-of-lives-from-air-pollution

Milwaukee Slumlords

In 2018, the city of Milwaukee also attempted to force a notorious landlord, Elijah Mohammad Rashaed, out of their city. The city had placed Mr. Rashaed’s 157 properties with approximately 300 units into the hands of a court-ordered property management firm. The property management firm agreed with the city’s move to find Mr. Rashaed in contempt for failing to comply with court ordered conditions. He contacted numerous tenants urging them not to pay the property management firm and to either refuse to pay rent or send their rent to him directly, against court orders. Rashaed also offered his tenants options to rent to own, in an attempt to regain control of the properties. His tenants consist of mostly low income individuals.

As a result the city of Milwaukee urged that Rashaed be forced to liquidate his properties. Despite the city’s efforts, three years later he was back in business in Milwaukee.

An even larger rental tycoon is Youssef Berrada, whose company, Berrada companies, owned no less than 292 properties in Milwaukee and claims ownership of 8000 rental units nationwide. His tenants are predominantly black and low income. In 2017, one in ten eviction cases in the city were filed by the Berrada companies.

One of the problems with excessive and unyielding evictions is that often other landlords will not rent to someone who has an eviction and it can remain on the tenant’s public record for a very long time. With instances of filing 99 evictions in a single day, Berrada companies uses the court system to collect rent, often a few days in arrears. Rapidly applied late fees make it even harder for the tenant to avoid eviction. Such evictions often drive tenants into a situation where they are forced to rent in dangerous areas or neglected properties and are more likely to face homelessness.

See also https://www.jsonline.com/story/news/politics/2019/11/20/milwaukee-rental-company-criticized-after-employee-displays-dummy-african-american-shackles-being-ly/4253031002/

Seattle Has Slumlords Too

Some might be surprised by the cities victimized by unscrupulous landlords. But cities like Seattle are no exception. This was the case of Beacon Hill’s Thai Columbian Apartments in 2016. In an article from the Seattle Solidarity Network, tenants of this complex “had long been used to living with broken refrigerators, broken heaters, water leaks, rats, and cockroaches. They put up with it, because the rent was low.”https://itsgoingdown.org/seattle-tenants-took-fought-slumlord/

But when they received a notice that a new management company was taking over and raising the rent 25% without addressing any of the complaints, they took action and organized. Putting together a list of demands they approached the management company and gave them five days to begin addressing the long list of concerns with the property. These demands were ignored.

Through direct action some demands were met. A railing that a child had fallen through was repaired. A refrigerator replaced. Some rent increases were delayed. Ultimately the battle was lost.

An earlier battle in 2015 against landlord Carl Haglund had resulted in a lawsuit claiming defamation over being referred to as a slumlord. This in spite of the fact that:

“Sahro Farah, a tenant at the Haglund building in southeast Seattle, wrote in a declaration that before Haglund purchased the building, the apartments had issues like defective heaters. The previous landlord would provide a space heater”https://www.thestranger.com/slog/2018/06/04/27079294/notorious-slumlord-carl-haglund-gives-up-on-defamation-claim-against-sawant

Haglund made no effort to correct the numerous problems and felt convinced that city officials “abused their powers”.

By examining the most notorious landlords and slumlords in various areas we see a trend where there is a concentration of rental property into the hands of larger and less scrupulous landlords.  These slumlords then use the law to increase profits from multiple units through the eviction process. This effectively stifles complaints about property conditions. The sole purpose is to increase the amount per unit and to use the court to collect late rents and the legal fees accrued as a result.

Cities must crack down on such activities. This goes beyond the single family homeowner who converts a basement into an apartment. We see amateur investors purchasing properties without the expertise or desire to manage them properly and cutting costs while optimizing profits. And then we see the big players who become millionaires with help of the eviction game, preying on low income families who become less and less able to find affordable housing.

Being a Landlord Must Require a Commitment to Safety

From the single illegally converted basement, to large properties, we fail to see a basic regard for public safety as a primary concern. We can probably shut down the guy with the single basement unit through inspections and fines. But the larger entities are much more difficult to bring into line or shut down. Often in these instances, effective actions take years to accomplish.

According to the National Low Income Housing Coalition: 6.8 million more housing units are needed across the country. 580,000 people are homeless each night. 70% of extremely low income families pay half their income for rent. And only one in four families who need assistance receive it.  In fact, there is no state or county where a minimum wage worker can afford a two-bedroom apartment.

Further, increasing affordable housing raises the nation’s income.

“Increasing access to affordable housing bolsters economic growth. Research shows that the shortage of affordable housing costs the American economy about $2 trillion a year in lower wages and productivity.” https://nlihc.org/explore-issues/why-we-care/problem

While our current administration under President Biden proposes a big boost for affordable housing, we are still looking at a ten year plan which will take great effort and time to implement. Part of this plan includes money to conserve existing housing and to renovate multifamily homes with energy-efficient and weather-resilient upgrades.

We see some movement towards the latter focus in a recent story from Ann Arbor, Michigan in which it was proposed that gas-burning appliances and furnaces be phased out for electricity. This move towards non-fuel burning devices brought on a response from DTE Energy which immediately set about making a big investment in gas infrastructure, replacing thousands of home gas lines.

Moving at cross purposes has been the thorn in America’s side for a very long time. The phrase “the more things change, the more they stay the same” comes to mind when speaking of safe affordable housing.  The more I explore this topic the more it seems to grow. When this happens I have to refocus on the individual stories of lives lost and what would have prevented the loss of those lives. We expect that people might be safe, in the very least, sleeping in their homes. It is a tragedy that greed, negligence and ignorance are sometimes the key players in these pointless deaths.

[1] The smaller the apartment, the greater the risk of carbon monoxide poisoning in situations where proper combustion air is not engineered into the apartment. Without proper fresh air venting, a fuel burning appliance may quickly consume much of the oxygen in a space. As soon as an environment has an oxygen deficiency, carbon monoxide levels in the exhaust gases increase. We have seen small Chicago apartments (under 400 square feet) where even the stove top burners can elevate CO levels above 20 ppm.

[2] Unquestionably, the ambient air levels in this unit were far higher than recorded. Often times first responders fail to document the highest ambient air levels, either because the apartment has been ventilated before the arrival or the CO levels were checked by improperly working devices. It is virtually impossible for someone to die from CO exposure in a place where the ambient air levels do not reach more than 100 ppm.

 

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