Middletown pushed to oust poor renters

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.  http://www.cincinnati.com/story/news/politics/2014/05/26/public-housing-slated-demolition/9602943/" rel="nofollow - Colerain Township are seeing low-income housing being built as CMHA tries to spread Section 8 housing out across Hamilton County.

ALSO:  http://www.cincinnati.com/story/news/2014/06/06/avondale-housing-historic/10076409/" rel="nofollow - 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.

Posted: 5:21 p.m. Monday, June 30, 2014

Middletown expected to transfer Section 8 vouchers to Butler Metro

By  http://www.journal-news.com/staff/michael-d-pitman/" rel="nofollow - Staff Writer

MIDDLETOWN — 

    Middletown Public Housing Agency will cease to exist after Sept. 30 provided the board accepts a Voluntary Compliance Agreement and Memorandum of Understanding at its meeting Tuesday night, according to a news release from the city.

    If accepted by MPHA, this will end a dispute with the U.S. Department of Housing and Urban Development where the city’s housing authority wanted to give back 1,008 of its 1,662 Section 8 vouchers, also known as housing choice vouchers.

    The Voluntary Compliance Agreement and Memorandum of Understanding, which was not available to the Journal-News late Monday, calls for the city’s housing board to give all of its 1,662 Section 8 vouchers assigned by HUD to the Butler Metro and Warren Metro housing authorities, according to city Law Director Les Landen.

    Butler Metro Housing Authority Executive Director Phyllis Hitte declined to comment because HUD has not yet issued a statement. Butler Metro does handle more than 1,100     Section 8 vouchers and Warren Metro handles nearly 450 Section 8 vouchers. The potential agreement will give housing authorities in each Butler and Warren counties control of all of the Section 8 vouchers assigned to the respective counties.

    “At this point, we were the only housing authority in the state of Ohio that was running on a municipal basis other than one other city, and that city had been ordered to do so by the courts,” said City Manager Doug Adkins. “We just thought that the counties would be the more appropriate entities to administer this very valuable public resource.”

    The MPHA approved a plan in October 2012 that would reduce its vouchers to 654, which is what city officials said Middletown could support in subsidized housing. Subsidized housing in the city includes the Section 8 voucher program with Middletown and Butler Metro and Low-Income Tax Credit Housing. The cut was designed to allow Middletown to only have 10 percent of its housing stock as subsidized housing.

    Until Dec. 1, 1999, the city had 774 Section 8 vouchers. But from 1999 to 2005, the city accepted 888 vouchers in order to reduce the vacancy rates of older and less-desirable homes, and to ensure that housing remained in compliance with city code, according to the plan that prompted HUD officials to ask Middletown to reconsider its position.

Middletown landlord Dan Tracy said he’s not surprised by the presumptive action that is anticipated to happen Tuesday evening. He feels Middletown’s Section 8 program needed to be “cleaned up with stricter rules.”

    “The city didn’t accomplish what they wanted to accomplish by doing things the wrong way,” Tracy said. “I think that (the Section 8 program) will be run as it is across the United States.”

    According to the latest report, the city has just more than 1,300 Section 8 vouchers.

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.

Sheila McLaughlin, smclaughlin@enquirer.com10:05 p.m. EDT July 1, 2014

Middletown Public Housing Authority voted Tuesday night to dissolve the agency amid accusations that it tried to kick tenants out of the program and hassled its largest landlords to reduce the number of Section 8 housing units available.

In essence it was a unanimous decision voiced by council members. All are members of the housing authority.

The next step will happen July 15, when council approves the same Memorandum of Understanding and compliance agreement with the U.S. Department of Housing and Urban Development.

In doing so, the city agrees to turn over its 1,662 Section 8 housing vouchers to metropolitan housing authorities in Butler and Warren counties. Middletown was the only city in Ohio that voluntarily ran a housing authority. Most programs are administered through counties.

“No one who has a voucher will lose it as a result of this agreement,” City Manager Doug Adkins said. “Subsidized housing will still be available in the community for low-income residents.”

The Middletown Public Housing Agency should be shut down by September.

The agreement also bans Middletown officials from singling out or discriminating against tenants, owners, landlords or property managers who participate in the Section 8 program within the city limit in “the application of building codes, health codes, zoning requirements or matters or similar matters of local law enforcement.”

A recent Enquirer investigation found hundreds of documents that detailed the city’s plan to get rid of at least two-thirds of Middletown Public Housing Agency’s 1,662 Section 8 vouchers.

They said 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, even though previous councils had sought to more than triple the number of vouchers to help pay for the program’s administrative costs. They denied trying to push out low-income residents.

However, some landlords were placed under criminal investigation and charged with felony theft after subsequent audits of their Section 8 records. Dan Tracy was one of them. He was kicked out of the city program as a result, even though HUD allowed him back in. He’s suing Middletown over lost business.

“The city has been hard-nosed about it. A lawsuit could have been avoided by doing the right thing,” Tracy said. ■

I do hate to tell you but this is just the beginning of the Middletown Section 8 Voucher Scandal.