Taking advantage of low-income homebuyers in DC — all the way to the bank
This column was first published by TheDCLine.org on Feb. 18.
When nine Black women were accepted into DC’s Home Purchase Assistance Program for first-time homebuyers, they believed they were moving to the next rung of the economic ladder through the acquisition of real estate while providing stable housing for themselves and their children. Instead, they were thrust into a multiyear battle over shoddy construction and repairs performed by the developer, Stanton View Development.
Further, they were forced to plead for assistance from the DC Department of Housing and Community Development (DHCD), the DC Department of Consumer and Regulatory Affairs (DCRA) and the DC Office of the Attorney General (OAG). The response from each agency was either callous or insufficient.
“I thought working my way from homelessness to homeownership would bring me and my family joy, but all we have had is a nightmare,” said Robin McKinney.
“You hear people talking about affordable housing and helping native Washingtonians like myself stay in the city. But when I needed the help, no one answered the call,” she added.
The nine women — McKinney, LaDonna May, Ade Adenariwo, Britney Bennett, Theresa Brooks, Devina Callahan, Denine Edmonds, Ciera Johnson and Jaztina Somerville — purchased condos in 2017 at 1262 Talbert St. SE in Ward 8. Last month, they filed a lawsuit against Stanton View Development, RiverEast at Anacostia LLC and DHCD in DC Superior Court.
“The nine single black women that we represent have been left to fight for themselves. They have worked hard to live the dream of homeownership, not only as first-time home buyers, but many wanting to change the legacy of renting in their families,” LaRuby May of May Lightfoot PLLC, who is representing the homeowners, wrote in an email. Her sister, LaDonna, is among the injured.
“Their ask of the city — help us hold accountable the developers and builders who owed us a safe place to live. The District response was to ignore them for over three years and leave them living in unsafe living conditions,” added May.
Callahan said she is “afraid” for the physical safety and health of her children because of the “many problems that have been discovered in my home.” She said that within a year of moving to Talbert Street “my home began to fall apart right before my eyes.”
The lawsuit alleges Stanton View, RiverEast and DHCD violated the city’s Consumer Protection Procedures Act and the DC Human Rights Act, made false and misleading statements in a public offering, committed fraud, engaged in negligent construction, breached its warranty against structural defects, and intentionally inflicted emotional distress on the nine women.
Neither Stanton View Development — headed by Jerry Vines and Don Lee — nor RiverEast returned my telephone call or responded to my email seeking a comment on the allegations.
May told me that she has yet to receive an official response from the companies to the lawsuit. DHCD director Polly Donaldson did not directly respond to my email request for an interview.
Richard Livingstone, deputy chief of staff and communications director for the agency, writing on behalf of the DHCD, said, “We do not comment on pending litigation.” He did not reply to my subsequent email asking him to provide specific documents related to the construction of the condominiums known as RiverEast at Grandview.
The DC Office of the Attorney General has indicated to the courts that it will represent the DHCD; it is the official legal representative for every government agency. May indicated that all parties are expected to appear in court — virtually — in April.
The Talbert Street homeowners’ saga has raised questions about whether Mayor Muriel Bowser is, as she has claimed, committed to bringing quality homeownership to low- and moderate-income residents east of the Anacostia River. The women may not have been victims of traditional redlining. Nonetheless, it appears they have suffered similarly deceptive, exploitative and discriminatory practices combined with sluggish government enforcement.
Further, their stories expose the challenge ahead for D.C. elected officials who have promised to disrupt policies that perpetuate racial and economic inequity. Nearly all of the primary players in this controversy are African Americans.
Unsurprisingly, the lawsuit has accused Stanton View, RiverEast and DHCD with discrimination “on the basis of race, sex and income status.” The women assert that they were denied “property, services, products and treatment on an equal basis to white males and/or higher income individuals.” They also say they were denied “affordable quality housing that was safe and structurally sound as was provided white residents of defendants’ properties and residents in predominantly white populated wards” of DC.
One of the women reported water damage from dripping pipes in her kitchen and upstairs bathroom that eventually caused mold. Another found that every time she ran the water in her master bathroom, the toilet and tub in the lower-level bathroom would fill with sewage waste; she said she was forced to move after a pipe burst, rendering all the bathrooms inoperable.
“Not being able to live in a home due to plumbing issues, feeling unsafe in a unit and still having to pay a mortgage is frustrating, upsetting and unacceptable,” said Edmonds.
There were large cracks in the cement floors of one condo that may have been deliberately camouflaged with carpeting. If that weren’t enough, gaping holes developed between the windows and interior walls, according to the lawsuit.
The women reached out for help. Somerville tried to hire a lawyer; that person wanted $200 an hour. “Money I didn’t have,” Somerville said. “The mayor’s Ward 8 liaison offered me blow-up mattresses because I was sleeping in my living room due to the mold downstairs in my room.”
Like the others, LaDonna May said she initially took her complaints to Stanton View, hoping the company would do the right thing. “But they only did cosmetic fixes.” Sometimes the developer refused their entreaties, saying in at least one case that the warranty had expired.
Truth be told, there wasn’t any warranty, although D.C. law required the developer to purchase a surety bond that was at least 10% of the cost of the property. It was DHCD’s responsibility to enforce that requirement. It failed to do so, even though Stanton View had received more than $6 million from the city’s Housing Production Trust Fund.
Stanton View wasn’t made to buy the warranty bond until two years after the project was completed and only after the women sought assistance from DHCD, according to the lawsuit.
That little bit may be one reason the agency was mum when I asked a bunch of questions.
LaDonna May also took her case to the DC Department of Consumer and Regulatory Affairs. She hoped a housing inspector would cite the developer for structural deficiencies. The DCRA is by law required to approve all construction, particularly structural work, before issuing a certificate of occupancy.
Instead of holding itself accountable for its role in the problems homeowners were experiencing, DCRA cited May for housing violations and slapped her with more than $8,000 in fines, fees and penalties. A judge in the Office of Administrative Hearings ordered the agency to work out a solution; the DCRA ultimately dropped its case, according to the lawsuit.
The women also went to the DC Council’s housing committee, headed by at-large Council member Anita Bonds. They said they received no response. Then, they turned to the OAG’s Office of Consumer Protection.
Since becoming the city’s first elected attorney general, Karl Racine has developed a reputation for hunting down slum landlords. He has vigorously litigated against companies that deliberately deceive or commit fraud against DC residents.
The Talbert Street homeowners said, however, that “nothing happened” in response to their pleas for help. An OAG spokesperson disputed their assessment; an agency investigator toured the homes. “Since 2019, OAG has mediated between the homeowners and the developer of the condo building on Talbert Street SE to ensure necessary repairs were being made. The developer provided evidence that over $400,000 in repairs have been made since 2017,” the OAG spokesperson said, without indicating the total cost of work that is needed.“
In early 2021, our office learned of additional ongoing issues at the building, including sewage issues, which we were not previously aware of. This is still under active investigation by our office,” the spokesperson added.
“No one thought that my child and I were worth helping,” said LaDonna May. “They all were OK with us living in unsafe housing.” And, undoubtedly, paying mortgages for that unsafe housing. And being forced to honor covenants that prevent them from selling their property for a specified time.
In their lawsuit, the women have asked that such restrictions be removed, and that their status as first-time homebuyers be restored if they purchase a property elsewhere in DC. Further, they are demanding that Stanton View buy back “each unit at the [original] purchase price or market value, whichever is greater.” They also are requesting compensatory damages, reimbursement for out-of-pocket expenses, compensation for emotional distress, and reasonable attorneys’ fees. If a jury gets to consider the case, they may get all that and more.
Where I am most focused, however, is on the demand that the District revoke or suspend Stanton View’s business license for failure to operate in the public interest. Equally important is that the city be ordered not to provide any additional funding to the company or its affiliates.
That kind of clear and aggressive response may not prevent racial or economic inequity in real estate transactions. But it could reduce it by taking proven discriminators off the field.
jonetta rose barras is an author and freelance journalist, covering national and local issues including politics, childhood trauma, public education, economic development and urban public policies. She can be reached at [email protected]