Middletown pushed to oust poor renters

Sheila McLaughlin, smclaughlin@enquirer.com  5:43 a.m. EDT June 10, 2014

The city of Middletown has been trying for several years to push out its poor.

Hundreds of pages of documents and court records obtained by The Enquirer in an investigation provided a glimpse of Middletown's plan to get rid of Section 8 tenants – a move that one national public policy expert called "perverse."

Those documents detail how the city has threatened tenants with losing their housing assistance if they have delinquent water bills from years past. They talk about putting "problematic" Section 8 landlords through special audits and background checks to weed them out of the program and reduce the amount of low-income housing available in Middletown.

"If we remove those owners from the program, we will reduce the number of available Section 8 rental properties within the City," Community Revitalization Director Doug Adkins wrote in a 2012 Section 8 housing analysis for city council.

In 2010, Adkins discussed those same topics in an earlier analysis. He put it this way: "The beauty of the changes proposed … is that we do not require HUD approval."

Adkins was recently tapped to become city manager.

Now, Middletown Public Housing Agency is under a civil rights review by the U.S. Department of Housing and Urban Development. And two Section 8 landlords have accused Middletown officials of using questionable tactics to get rid of the city's poor.

HUD officials are negotiating with Middletown to shut down its public housing agency.

City officials deny wrongdoing.

"This isn't some effort to drive people with less money out of the city of Middletown," Law Director Les Landen said. "There isn't any targeting here."

Section 8 vouchers cluster in Middletown

Turmoil in Middletown comes as the suburbs of Cincinnati brace for more Section 8 housing. Cincinnati Metropolitan Housing Authority is preparing to demolish its largest public housing complexes. Suburban communities such as Colerain Township are seeing low-income housing being built as CMHA tries to spread Section 8 housing out across Hamilton County.

ALSO: Avondale Section 8 housing could be 'historic'

According to the Center on Budget and Policy Priorities in Washington, D.C., more than 5 million people in more than 2 million low-income households nationally use housing vouchers to rent apartments and homes on the private market.

Middletown is one of two cities in Ohio that operate their own public housing agencies. Typically, an agency handles HUD housing for an entire county, HUD officials said. Butler County has a housing authority and administers the Section 8 program outside of Middletown. Parma, near Cleveland, is the other city in Ohio that operates its own housing authority. Unlike Middletown, Parma's operation is court-ordered.

Middletown has sought more vouchers from HUD over the years as the once-thriving industrial town lost its paper mills and unemployment spiked. The agency now manages 1,662 vouchers.

City officials now are saying Section 8 clusters have created pockets of poverty in a city that is trying to revitalize. With about 50,000 residents, Middletown has 13 percent of Butler County's population but has 56 percent of its Section 8 housing vouchers. City officials argue that's out of balance.

The clusters didn't provide tax money to the city but instead drained its police and fire services budgets because of increased calls for service, city documents say.

Middletown officials want to get rid of at least 1,000 vouchers.

"The HUD policy has always been to avoid concentrations of poverty, and right now Middletown has a voucher program that has more vouchers than the rest of Butler County combined," Landen said. "If you are talking about trying to limit concentrations of poverty so they don't get into pockets, having two-thirds of the vouchers in the county in one place seems to be a bit out of whack."

Middletown resident Brandi Wilson, a 31-year-old mother, feels like city officials don't want them around.

Wilson grew up in Middletown. She said she's been on Section 8 since 2007 after she couldn't afford housing for her and her young son after a divorce.

"We'd be homeless," Wilson said of the prospect of Middletown reducing the amount of Section 8 housing.

Section 8 landlords: Criminals or victims?

Section 8 landlords Dan Tracy of Middletown and Jeff Faulkner of Camden said the city's campaign to reduce Section 8 housing has unfairly put them under criminal investigation.

City officials acknowledged they couldn't just kick tenants out of the Section 8 program because of HUD rules, city documents reveal. However, the city's 2012 Section 8 Analysis authored by Adkins published a list of "problematic" landlords whose properties chalked up the highest calls for service.

Tracy's and Faulkner's names were on that list. Tracy had 51 Section 8 units out of 150 units he rented out in the city. Faulkner had over 100 Section 8 units.

Both men came under police investigation and were charged with serious felonies for allegedly stealing money from Middletown's Section 8 voucher program. Both men and their attorneys claim they were unjustly targeted by the city in its plan to reduce Section 8 tenants.

"We think this is a backhanded way of eliminating at least a certain percentage of the vouchers from the city of Middletown," said Dwight Packard II, who is helping Tracy obtain documents from Middletown to be used in a possible lawsuit against the city.

"I'm sure they have their reasons, but there's still the law. You still have to improve your community in a way that doesn't trample other people's rights," Packard said.

Allan Mallach, a scholar in the fields of housing for the Brookings Institution in Washington, D.C., said pushing out voucher holders by going after landlords is a "doubly perverse" way of getting rid of a community's poor.

"There are a lot of poor people. They are not going to disappear," Mallach said. "On one hand (they are) driving out something that the people of the community desperately need. On the other, they are basically singling out landlords to persecute them."

Packard filed legal action against the city last month to force them to produce documents involving the city's investigation of Tracy and other landlords. Packard said city officials had denied the records under the Ohio Public Records Act, contending the request was too broad.

Tracy, 66, a Section 8 landlord for decades, was charged in October 2012 with six counts of felony theft for allegedly taking $4,352 in rent payments from the city public housing agency for Section 8 tenants who did not live at the properties. Tracy said the city audited him in 2011, going back several years, as part of its plan to oust poor people.

In a plea agreement, Tracy pleaded no contest to one misdemeanor charge of petty theft – a crime that prompted Middletown to kick him out of the voucher program. Tracy claims innocence of any wrongdoing. He said his then-criminal defense attorney advised him to plead to the misdemeanor charge instead of spending more money and taking chances on an expensive trial. Packard was not that attorney.

If convicted of all charges, Tracy had faced up to 10 years in prison.

"I didn't have the evidence that I have now," Tracy said.

That evidence includes affidavits from the two tenants involved in the Section 8 rentals and from a former housing agency employee.

With Packard's help, Tracy presented his case along with those affidavits to HUD, which had also suspended him from participating in the Section 8 program because of the conviction.

Based on Tracy's appeal, HUD overturned its suspension of Tracy in January 2014. Middletown still will not allow him to participate in the city's program.

HUD spokesman Brian Gillen said the information Tracy provided clarified the facts and was sufficient to terminate HUD's suspension.

"I'm the type of person that cannot be labeled as a thief or a liar because that I am not. It really weighed on me. It was really hard for me to accept that. So, I set out to prove myself," Tracy said.

Similar charges against Faulkner were dismissed at a preliminary hearing in Middletown Municipal Court, according to a court transcript obtained by The Enquirer. A judge said whatever happened wasn't criminal.

The hearing was set to determine if there was enough evidence to send the case to a Butler County grand jury for indictment. The theft charges could have put Faulkner in prison for up to 2½ years.

Faulkner, a longtime real estate agent, faced two felony theft charges for allegedly collecting $7,386 in Section 8 rent to which he wasn't entitled.

In one incident, the housing agency had recouped the alleged misappropriated money from Faulkner's Section 8 monthly rent check. The agency returned some of it to Faulkner after he complained. Police then charged him with stealing the same money.

"They give me the money and turn around and get me for fraud," Faulkner said.

Middletown Municipal Judge Mark Wall threw out the charges this year on Jan. 14, saying there wasn't probable cause to make him believe that Faulkner had committed any crimes.

"I've got an obligation to look at the evidence," Wall said, according to a transcript of the court hearing. "You're accusing him of basically stealing this money. It may be a breach of contract. There are other remedies here."

"It seems pretty clear they are trying to get rid of the housing by prosecuting these landlords on matters that are civil in nature, not criminal," said Faulkner's attorney, Charlie Rittgers.

Landen said city officials were only trying to enforce agency rules.

"If a landlord violates the rules, we are going to pursue the necessary remedies against that landlord. It's that simple. It's a program that is run under sets of rules. Those rules are to be enforced," Landen said. "We don't want landlords involved who have attempted to manipulate the system or attempted in some way to defraud the system."

HUD scrutinizing Middletown housing

The Middletown Public Housing Agency has been under HUD's microscope for at least a year, according to documents obtained by The Enquirer.

The federal agency notified the Middletown Public Housing Agency in May 2013 that it was being investigated for possible civil rights violations. That investigation is ongoing while HUD attempts to strike a deal with Middletown to turn over its vouchers to Butler and Warren metropolitan housing authorities.

HUD spokesman Brian Gillen said the investigation was sparked by Middletown's plan to reduce the number of housing vouchers. "The circumstances surrounding the specifics of (Middletown's) plan raised fair-housing concerns," he said.

Butler and Warren counties' housing agencies have expressed interest in absorbing Middletown's vouchers.

Phyllis Hitte, executive director of Butler Metropolitan Housing Authority, said HUD asked the two agencies if they would be interested in taking on Middletown's vouchers.

If that occurs, it remains to be seen whether Middletown would reach its goal of reducing hotspots of Section 8.

"This is a choice program. We can't make them go any place. If Middletown is where they choose to live, they can still live there," Landen said.

Don't understand the city at all on this Vivian. In an earlier post, you brought to the table information that the council with Smith, Nenni, Scott-Jones and others who actually wanted 800+ additional vouchers on top of what the city had at the time which was 700+, a more balanced number.

Now, they change direction 180 degrees and want all the excess vouchers out of the city. All of a sudden, while, once upon a time, striving to make this a low income community, an about face has happened and they want all low income out. Apparently too late as HUD will probably make them keep the excess. The damage has been done I believe. Typical for this group.

It is the city's fault that we have an overabundance of Section 8 in the first place. Look in the mirror city officials to see who is to blame here.

Did they really think that the Section 8 program would bring a comparable amount of fed revenue to the city rather than generating revenue using more traditonal new company taxation and employee income taxes?

Must have been easier to reach out for the fed money as they are not smart enough to manufacture new jobs like normal cities do.

Vet

INCREASE IN SECTION 8 VOUCHERS 1999 - 2005

December 1, 1999…………75 Vouchers

May 1, 2000…………...…….50 Vouchers
September 1, 2000….……..55 Vouchers
November 1, 2000…..……200 Vouchers

October 1, 2001…..………200 Vouchers

January 1, 2003…………..200 Vouchers

October 1, 2005…………..108 Vouchers

Well, I guess we will be hearing an official announcement at the council meeting about Sec 8 going buy buy. Stay tuned!

It will probably be back to the previous number of 1662 in a very short time.

Oh, my!!!  I thought our new City Manager said that it would never happen!?!?!?!

Have those geniuses on Council signed his employment contract yet?

Loved the article in the Jounal about Sec8. Spin it Dougie,Spin it!! Does he really think anyone believes what he just said? The real truth has been posted on this forum for a long time. I guess all he and Judy really accomplished was to avoid their indictments. IMO

And we still have the hefty attorney bill to pay. I suppose the city insurance will pay that,but will they cancel the city insurance especially with another suit possibly coming?

I believe that Miss Judy said that we would be short 1.5 million dollars in revenues in the 2015 budget. Our reserves are now at 15% so we can’t balance the budget using this money any more.

Weather Wax has been sold and that debt is now gone

Now all the HUD funds are leaving the city and those city jobs will be leaving or will  transfer over to the General Fund.

I believe the only major expense that City Hall can now cut from the budget is to transfer the Health Department over to Butler County. 

I do not believe that Mr Doug will be able to cut the Fire and Police Departments and further at this time.

Spider
I believe Mr Doug paid about $250,000 for the new Section 8 software that connected the Section 8 tenants with the police department and the water department. 

My bet is that Mr. Fooks will be promoted to the Dougmeister's previous position. Just think, once again he will be earning thousands similar to his days as a High-Risk, Sub-Prime Home Mortgage Originator with Countrywide and Chase. Go figure? He knows well of the problems that Nelson Self inherited in 2007-08 as well as the undertakings of the Dougmeister since early 2009.