1. PubliCola has learned that Carl Haglund, the landlord that’s come under harsh criticism for raising rents at a rundown Southeast Seattle building (which tenant advocates believe is Haglund’s way to avoid paying tenant relocation assistance), faces potential fines up to $165,000 after failing over the past year to follow the tenants relocation assistance rules at a different property he owns near Hamilton Viewpoint Park on the northern tip of West Seattle.
According to DPD records, a notice of violation of the Tenant Relocation Assistance Ordinance was issued on October 2, 2014—and Haglund did not comply with the notice until March 26, 2015, 165 days after the date set for compliance. Six households at 1091 California Lane Southwest were displaced, according to DPD, as Haglund missed deadlines to both alert the city of the major renovations (which would have triggered the tenant relocation process) and then missed the deadline to alert the tenants of their rights. DPD says $18,000 in tenant relocation assistance money was left on the table. (The address is also Haglund's business address.)
As has been widely reported, Haglund raised rents by hundreds of dollars at a Southeast Seattle apartment building, 6511 Rainier Avenue South, that’s plagued by intolerable living conditions: faulty heat and water, peeling paint and mold, broken windows, stoves, and cabinets, water damage, and cockroaches and rodents. (Haglund—who says he’s only received two work orders since purchasing the Rainier Avenue South building in July and that 10 tenants out of 13 units are choosing to stay—gave the proper 60-day notice for the increases, $1,175 for two-bedroom units and $900 for one-bedroom units, according to a letter he sent to the press. However, one tenant has said her rent on a two-bedroom has gone up to $1,550. Haglund's letter also notes that the building passed city inspection; Haglund's harshest critic, council member Kshama Sawant, alerted the media that there are 225 code violations at the Rainier Avenue property.)
Critics believe the rent hike is a classic case of an “economic eviction” where landlords raise rents as a way to avoid paying tenant relocation assistance—a 1990 city law that requires landlords doing extensive remodeling or demolition to help pay for relocation assistance and give the tenants six months to find a new place. The “economic eviction” loophole? Landlords force tenants to move by raising rents and then do the renovations, bringing in higher paying tenants, avoiding the relocation assistance payments altogether. (The relocation law requires landlords to pay half and the city to pay the other half—the current amount is $3,340 per household; it’s adjusted annually to inflation, originally set at $2,000 in 1990.) The city council addressed the loophole on Monday, passing a rule that fines landlords who are caught doing demolitions or major upgrades after forcing tenants out with massive increases.
According to the Seattle Times, Haglund doesn’t think the tenant relocation equation should apply at his Southeast Seattle property, “because the rents there have been kept so far below market rates and because many tenants there are living with multiple people not listed on their leases.”
According to the letter Haglund sent to the press, he also says he didn’t know about the problems at the Southeast Seattle property when he bought the building in July 2015, saying he needs to raise rents to cover the fixes. The letter said he would give tenants a month’s free rent and that the rents wouldn’t increase until the repairs were done.
Department of Planning and Development supervisor Jim Metz tells PubliCola Haglund should have followed the tenant relocation assistance rules in this case. “Giving a month’s free rent is just inadequate to the need, since most units are renting for much less than a $1,000 per month,” says Metz, who oversees the tenant relocation assistance program. Haglund would have to pay $1,670 per household versus taking a smaller hit on the rents, currently as low as $550 per month. Metz says paying more and giving tenants up to six months to find a new place is only “the right thing to do.”
The Seattle Times reported that Haglund likes the council’s new rule preventing “economic eviction” and that he supports the tenant relocation assistance rules.
I have a message in to Haglund about the tenants relocation assistance violations at his company Big Rooster Investments' West Seattle property.
UPDATE: Haglund gave me the following statement: "This fine is incorrect, and stems from a misunderstanding. Unfortunately, it remains the focus of ongoing legal back-and-forth with the city and we can't say anymore at this time."
2. The Stranger reported this week that a new independent expenditure group has formed with plans to support city council president Tim Burgess and criticize his opponent, tenants rights advocate Jon Grant. Local political consultant Jason Bennett says the IE is being supported in part by an unnamed veterans group that is critical of the Tenants' Union of Washington State; Grant was the executive director of the union from 2010 until he decided to run for city council earlier this year. (Campaign finance records for the IE group, which just registered this week, don't report any contributors yet.)
PubliCola has learned that Volunteers of America, a United Way affiliate that supports vets, is part of the IE's message. Here's the deal: The VOA clashed with the tenants union in 2012 when the VOA decided to sell the Theodora, a low-income Wedgwood building the organization had owned and managed for 32 years. The union championed the plight of senior vets who were being displaced by the sale.
The VOA's Western Washington president Phil Smith sent a hypercritical letter about the Tenants Union to King County executive Dow Constantine in March 2015, noting that the union “is funded in part with King County taxpayer dollars.”
The VOA letter says the union was “more interested in media campaigns,” creating “an adversarial environment,” and “raising false hopes” by taking a hardline position, according to VOA, that the residents should stay put when that “was not only impossible, but also not the right solution for tenants' long-term needs.”
After trying to sell the building to a nonprofit and finding no takers, VOA sold the building to Goodman Real Estate, who pledged to keep the building affordable at 85 percent of the area median income.
The letter states:
The TU's uncompromising position was to let residents stay at the Theodora indefinitely. Since the building was going to be without power, water or heat for nearly a year while it underwent major internal and external construction, all residents needed to permanently relocate. A majority of the residents in the building were not just low-income, but Section 8 recipients who were often physically or mentally limited. While they could return once the building was renovated, it was not in their best, long-term interest to do so.
VOA and GRE committed to a thoughtful financial and individualized relocation assistance program that focused on the needs of the 30 residents remaining in the building. Residents received $9,000 in relocation assistance, as well as one-on-one assistance from an individual we retained to help them find housing that met their personal and financial needs. This individual also worked directly with Seattle Housing Authority, HUD and any other service organization tied to each individual to ensure residents did not lose their Section 8 vouchers and that they did not lose any other services provided to them. Our program was a solid success -all residents' Section 8 vouchers were transferred into portable vouchers and nearly 75% were able to stay within the Seattle city limits. Every resident found a new home, the majority in newer, better facilities.
Although we tried to engage the Tenant's Union in productive dialogue, their position and priority was that residents stay in the old building just the way it was. They didn't seem to support or care about the best transition for residents. Staying in the building was not only impossible, but also not the right solution for tenants' long-term needs.
The TU chose to engage directly with residents, raising false hopes and encouraging them to avoid finding other housing. They created an adversarial environment by telling tenants, many with mental health issues, that their rights had been violated and that no one was to be trusted. Some tenants, who had few ties to friends and family, had relied on staff for years as a regular part of their social support. The TU built factions and resentment between tenants who chose to take advantage of the support offered and those who wrongly believed the TU could make the sale of the property go away. Putting the residents' long-term well being did not seem to be a priority for the Tenant's Union.
I have a message in to Grant. Here is a blog that supported the Tenants' Union cause, the Theodora Rescue Committee, that was critical of the relocation. And here is a letter from disappointed Theodora residents asking VOA to commit to "continue to maintain low-income housing at the Theodora" and to keep residents in the decision making process.
3. I will be on KPLU tomorrow morning reviewing the news of the week. Tune in 88.5 FM at ten o'clock.