Federal rental assistance checks went to landlords of uninhabitable properties, newspaper investigation finds

Apr. 4—A federally funded rental assistance program helped more than 1,500 Montgomery County residents stay in their homes during the pandemic last year, but some of the largest payments went to landlords violating program rules, a Dayton Daily News investigation found.

Our investigation found: — The owners of 10 rentals that received federally funded rental assistance last year say they are paying the money back after being contacted by the Dayton Daily News. This includes seven of the 12 rental units that got at least $10,000 through the program. The total reportedly being reimbursed is $100,775. — The property that received the largest payment, $11,500, was uninhabitable last year. The city has signs posted saying presence on the premises is prohibited. The landlord paid back the money for it and another property after being contacted by the newspaper. — The landlord who received reimbursement for the highest monthly rent — $1,800 a month — has the same voting address as the tenant and didn't disclose on the application that the renter is her daughter. They are also paying back the money after being contacted by the newspaper. — Of the 12 units that received more than $10,000, five had no running water last year. Two owe more than $10,000 in back taxes. Two are on the city of Dayton's nuisance property list. Some units met all three of these criteria.

Montgomery County used $5 million from the federal CARES Act to provide rental assistance to 1,587 households last year. The county paid Miami Valley Community Action Partnership $261,000 to administer the program.

MVCAP President Lisa Stempler said the coronavirus pandemic affected people across the county and her agency quickly built the rental assistance program from scratch to keep people in their homes. For this reason, it didn't have the documentation and eligibility requirements of similar programs.

"The primary objective of the rental, utility and mortgage assistance programs at MVCAP is to keep people safely housed and ensure continued access to utilities," she said. "Our application processing volume increased by a factor of 50 from 2019 to 2020, and our application volume is steadily increasing in 2021. Due to herculean efforts of our staff and availability of this funding, thousands of families in the Miami Valley avoided eviction and many were spared from homelessness.

"Our conversations with the Dayton Daily News over the past two weeks have brought to light a handful of rental assistance applications where the applicant and/or the landlord provided inaccurate information during the application process," she said. "MVCAP is working with Montgomery County to look into these cases and will address each case individually."

Montgomery County Administrator Michael Colbert said: "We understand that anomalies happen, and people could have unknowingly made a mistake on their application. But for those who knowingly committed fraud, we will recoup those funds."

The Dayton Daily News analyzed the 12 rental units where landlords received more than $10,000 and the one that got the highest monthly rent.

'Tenant was squatter. Returning funds'

Several landlords paid back the money they received after the Dayton Daily News contacted them.

This includes David Martin, who received $11,500 for unpaid rent at a house on Wheatley Avenue in Dayton, claiming a renter was there March through December. This was the largest single payment through the program.

Martin obtained the home from the city of Dayton in 2019 through a quit-claim deed. He has since paid $145 in taxes and is on a payment plan for the remaining $1,840 in back taxes.

A reporter visited the building and found some of the windows boarded up and the garage door sealed with material labeled: "Presence on these premises prohibited without consent from the city of Dayton...violators, including owners, shall be prosecuted." The same sign can be seen on the 2018 property photo taken by the Montgomery County Auditor's Office.

The house has no electric meter. The water has been turned off since 2019, city officials said.

"It actually was a situation where people were squatting on the property and instead of kicking them out, I just kind of worked with them," Martin told the newspaper.

The house was livable, Martin said, and the tenant was there. He said he determined the property was worth the $1,150 a month rent listed in the program application because it was furnished. He said the tenant paid some of that.

"I'm just glad the program was able to help cover those expenses because as a landlord I'm still paying property tax and all that kind of stuff on the property," he said. "So that was definitely unfair for me to have to do that and I know for a fact somebody's living in my property. It was either that or call the police and have them escorted out."

After speaking to the Dayton Daily News, Martin contacted MVCAP and returned the money he received through the program — as well as for another property funded by a different program.

On each check, he wrote, "Tenant was squatter. Returning funds," according to MVCAP officials.

The second property, on Grafton Avenue in Dayton, received $9,400 in rental assistance through a different CARES Act program funded through the state.

A reporter visited that property and found it boarded up with multiple signs from the city saying presence on the premises is prohibited. Martin obtained the property from the city of Dayton in 2019.

Properties on city nuisance list

The company Eagle Renovations was the listed landlord for half of the 12 units paid more than $10,000, including some that had no water service last year.

After being contacted by the Dayton Daily News, Eagle Renovations owner Myron Lewis said his company went back and found discrepancies on the applications. He said the company is paying back all the money it received for the seven units that got rental assistance through the program, totaling $70,875.

"The person we had working (on the applications), we didn't know exactly what they were doing. I didn't know. And now that we found out exactly what it was all about, we don't feel comfortable having the money and we're just going to take it and give it all back to them," he said.

The program paid Eagle Renovations $10,125 for nine months' rent at 918 Xenia Ave. in Dayton. The listed tenant is Sean Fields, which is the same name as the property owner in county records. The building is a duplex, and the rental assistance program paid $9,000 for the other unit, 920 Xenia Ave., for a tenant with the same last name as Fields.

The property is currently on the city of Dayton's nuisance list. A Dayton Daily News reporter visited it recently and found it in disrepair. The door to 918 Xenia Ave. is sealed with plywood, windows are boarded up or missing and fire damage can be seen.

The window to 920 Xenia Ave. is covered with a Dayton Fire Department sign put up in 2017 warning firefighters of potential hazards in the building. Another window is covered with a sign from the city saying presence on the premises is prohibited.

Neither unit has had water service in the past year, according to city officials.

Fields — whom Lewis said is his cousin — could not be reached for comment.

The duplex is one of two properties that received rental assistance and are on the city of Dayton's list of nuisance properties eligible for demolition.

The other property on the list, on Vernon Drive, is owned by a different landlord, received $1,650 in rental assistance and was occupied when a reporter visited. City officials said the property does have its utilities on, but it shouldn't be inhabited.

"Once a property is listed on the nuisance list, the owner needs to file a permit to gain permission to enter or occupy the home," city spokeswoman Toni Bankston said. "There does seem to be someone living there. At this time, Housing will verify if the necessary permits were filed and if not, take steps to secure the property."

'Nobody lives there'

Neighbors say no one has lived in the Xenia Avenue duplex for years.

"Nobody lives there," said Shane Spitler, who rents a house across the street. "The city mows the grass."

Fields purchased the duplex in 2015 for $22,780 from Lewis, according to property records.

Fields has never paid taxes on the property and owes $21,368 in back taxes.

Lewis said Eagle Renovations handled the rental assistance paperwork for him with the understanding someone was living there.

Ocheya Lewis, Myron Lewis' wife and business partner, is the listed owner of another duplex on Neal Avenue in Dayton, each unit of which received $10,350 — nine months' rent at $1,150 a month from April through December 2020 — from the county program.

Ocheya Lewis bought the property in July 2020 for $9,800.

Myron Lewis said he doesn't know why the person who filled out the application claimed back rent through April when they bought the building in July.

A reporter visited that property and found it partially renovated. One unit had a new door and windows. The other unit had windows broken or covered with plywood.

Neighbors, who have lived there for up to seven years, said they saw no indication someone lived there last year. Neither unit in the duplex has had water turned on in the past year, according to city officials.

Myron Lewis said the units were occupied by someone buying them through a rent-to-own arrangement and fixing them up.

"He ended up forfeiting on it so we didn't end up going through with it, but it was occupied," he said. "I know the place, when they left out of there, it wasn't in the best shape. So we just started tearing all the stuff out of there."

Back taxes

The owner of a home on Williamson Drive in Harrison Twp. received a total of $10,000 for 10 months' rent but owes more than that in back taxes.

Property owner Leon Covington obtained the property in 2015 from the U.S. Department of Housing and Urban Development for $9,600. Property taxes haven't been paid since 2015 and Covington owes $11,502 in back taxes.

County voting records suggest the property was occupied last year by the listed tenant. A reporter visited the house and found it maintained.

Reached by the Dayton Daily News, Covington said the program helped his tenant catch up on her rent.

"I'm going to catch up on the taxes," he said. "I'll have to or they're going to take my property."

Undisclosed relationship

The average rent paid out through the program was $621. MVCAP officials say the average rent in the city of Dayton is about $860 a month, and in the county is around $1,100.

The property with the highest rent paid through the rental assistance program was on Marlay Road in Harrison Twp. Property owner Reba King was reimbursed for five months' rent at $1,800 a month through November. Records say $90 in late fees was waived.

The 2,558-square-foot, single-family home has two bedrooms and 2.5 bathrooms. No one answered the door when a reporter visited, but it was well-maintained and appeared someone lives there.

King obtained the property in 2016 through a quit-claim deed from a woman she refers to on social media as her mother. The tenant is a woman she refers to as her daughter.

King voted in November 2020 listing the Marley Road home as her address.

The application for rental assistance asks if you are related to the tenant. The applicant checked "No."

Contacted by the Dayton Daily News, King said she and the tenant are "fictive kin."

"We're not related," King said.

King would not comment on why her voting address is on Marlay Road when she said she lives in another property owned by the woman who gave her the Marlay house.

"That's very private," she said.

King said the $1,800 monthly rent is all-inclusive, including utilities and cable.

"That's the going rate if you look at the size of the property. If you look at the number of bedrooms, the quality of the home, bathrooms and all of that," she said.

"(The program) took a burden off the back rent. It gave an opportunity for repairs to get done. It was an opportunity to breathe for the tenant who was under-employed at the time," King said.

The tenant did not return calls seeking comment. But after the newspaper spoke to King, the tenant contacted MVCAP and said King mistakenly marked on the application that they aren't related, and that King is her mother.

She offered to refund the money, which county officials say they will ask her to do.

Renter: 'It really did help'

Freedom for Living Property Management received the most money: $407,913 for 67 properties, including three that got more than $10,000 through the program. A reporter visited those three properties and found them inhabited and maintained.

Officials with Freedom for Living Property Management did not return calls seeking comment.

The rental assistance program was part of $92.7 million Montgomery County received through the CARES Act. The county also spent $12.7 million on grants of up to $10,000 to more than 1,000 local small businesses.

Some landlords benefitted from the business assistance program as well, including the business owner who received the most small business assistance.

Todd Kraner received $60,000 through the business assistance program for his six businesses, which are all property holding or managing companies. His company Point Management LLC also received rental assistance for 15 properties totaling $22,728.

"It's saved us," Kraner said of the county programs. "We have great working people, great retirees in the apartments or the mobile home parks. It's just tough on them."

Tenants lost their jobs, Kraner said, and while many spent their stimulus checks on rent and utilities, many did not.

He said he made his tenants aware of the rental assistance programs. Those who took advantage of it were able to stay in their homes. But the companies still lost income from those who wouldn't apply, and the small business grants helped them cover fixed costs.

"They saved us by helping us pay our mortgages, our insurance for those that did fail or just left us that didn't get any rental assistance," he said.

The program helped many families keep a roof over their heads. Sadia Robinson, a state tested nursing assistant, lost her job when the home health care company she worked for went out of business in March 2020. She couldn't get another job as the economy tanked, and she had no childcare for her three children, ages 14, 13 and 5. The older kids' school just went back in-person last week and she is trying to get the youngest boy into school.

"I've worked all my life. I'm 34-years-old," she said. "I was at my lowest."

The rental assistance program provided her landlord — whose main source of income is Robinson's rent — $2,080 for five months of rent. MVCAP also helped her get her driver's license reinstated and is continuing to help her with rent as she studies nursing at Sinclair Community College.

"It really did help me a lot," she said of the rental assistance program.

MVCAP expects to receive millions of dollars in additional rental, utility and mortgage assistance funding over the next year. The nonprofit recently created and is working to fill a compliance supervisor position. It also began an internal review of rental assistance files in preparation for future audits.

"The last year has been difficult for our community and for our agency, and we work to continuously improve our programs to meet our customers' needs," Stempler said.

Staff Writer Chris Stewart contributed to this report.



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