‘Unsafe’ and ‘neglected’: City tenants stuck in limbo with nonprofit housing provider that mishandled federal funds

Inside the three-story Reservoir Hill apartment building, a tenant points out his broken door, warped floorboards, water damage and moldy surfaces. The kitchen appliances in the one-bedroom unit have stopped working. And the tenant constantly gets notices his power will be shut off because the landlord hasn’t paid the bill.

Repairs are made, but new problems crop up fast. Several tenants, fed up with the conditions and empty promises at the building, told The Baltimore Banner they want out. They also have questions about the integrity of their landlord, whose mishandling of federal funds has cost him millions of dollars in contracts and may warrant prosecution or civil action from the U.S. Department of Justice.

But these tenants can’t afford to move from the federally subsidized property for people with disabilities and low incomes. It’s one of a few buildings in Baltimore housed under the U.S. Department of Housing and Urban Development’s Section 811 program, which helps pay for the costs of acquiring or developing affordable housing buildings on the condition they’re kept up for 40 years and have social services made available there.

Despite concerns about management, safety and maintenance, the U.S. Department of Housing and Urban Development has not given tenants at this building new vouchers to move. Federal officials also would not answer questions from The Banner about its plans to aid tenants seeking other housing options or address the code violations. Repeatedly, federal officials instructed a reporter to submit a public records request to access such information, which, one month later, still has not been returned.

Questions about this property and two others in Baltimore have loomed large over HUD for several months as federal officials investigate the property owner, Anthony Butler, CEO and president of AIDS Interfaith Residential Services, Inc. The hugely consequential nonprofit organization has a long and storied history of housing and counseling many of Baltimore’s most vulnerable citizens. But over the last 18 months, it has become a sore spot for city government leaders after Butler failed to pay several tenants’ rent, teeing them up for eviction and sending city officials into a mad dash to keep them housed.

As a result, city officials terminated two contracts with AIRS last year that, combined, housed and counseled about 140 tenants, costing AIRS millions of dollars. It also lost contracts with city health officials and Baltimore County government officials after similar nonpayment problems surfaced with low-income tenants there, too. Employees affiliated with the organization resigned en masse last year, and members of the nonprofit’s board have not responded to multiple requests for comment.

In all, about 450 households have been affected, said Irene Agustin, director of the Baltimore City Mayor’s Office of Homeless Services, during a Monday budget hearing. That includes about 195 households with children, according to city records obtained by The Banner, and nearly 800 people in all.

Now cash-strapped and under federal scrutiny by the federal housing department’s Office of the Inspector General, Butler remains in charge of three federally backed properties that together hold 52 units and dozens of residents. And inside at least one of those properties, tenants have lost faith.

“It’s just an unsafe building,” said Reginald Small Jr., 60, a tenant at the Lakeview Avenue apartment since 2019. “HUD is aware, and the city is aware, and they keep telling us they will do something about it. But they have neglected us.”

Small said he has stayed with relatives and friends when the problems at the apartment building become too much to bear, and many worry about his health and safety there.

“Everybody in there is on a fixed income, and no one has a lot of money,” Small added. “I’m there for a reason. I can’t just up and move.”

How it got here

Problems with Butler and AIRS began to mount at the end of 2021, when several landlords affiliated with two federal grant programs began to report to the city’s homeless services office that they had not received rent payments on time.

City officials at the homeless services office — which contracted with AIRS to distribute and oversee the federal awards — said they have evidence that Butler had been drawing funds from the accounts designed to pay for those tenants. But to this day, Butler has not accounted for what happened to the money meant for those rent payments. He also did not return comment for this story.

In previous interviews with The Banner, Butler initially said he had not received payment from the city. While city officials acknowledge that they had, on occasion, paid him late, he had been fully reimbursed by the time landlords began complaining. He also said he had not misused the funds.

Documents obtained by The Banner in a public records request last year show that HUD and city officials made an unannounced site visit to AIRS’ midtown office in March 2022 and seized records. A document review produced more than a dozen problems with those files, including half of them missing critical information needed to establish compliance with federal rules.

City officials continue to work through the problems caused by AIRS, Agustin said at Monday’s hearing.

Federal housing officials declined to give updates on the status of the HUD Office of the Inspector General’s investigation.

‘It’s a mess’

Before leaving city government in February, William Wells, deputy director of the Mayor’s Office of Homeless Services, appeared to recognize the urgency of the situation involving the HUD-supported properties.

In a September email to HUD officials, Wells said the city had been left to figure out how to “stabilize” these HUD-vouchered tenants, many of them living with “higher medical needs due to HIV status.” He tried organizing a meeting with HUD to see how the city could intervene, which never seemed to have taken place, according to emails obtained in a public records request by The Banner.

But representatives from the homeless services offices, and the city’s Department of Housing and Community Development, which handles code enforcement of city buildings, declined to comment for this story. Housing commissioner Alice Kennedy forwarded a reporter to the homeless services office, which deferred to HUD.

In the meantime, Small and other Lakeview Avenue tenants have made a troubling discovery: Despite many of them working hard to pay rent on time each month, Butler has not had a valid rental license at the property since 2021, according to the city’s property license database. That prohibits him from charging or collecting rent in Baltimore City.

Small and several other tenants said they have stopped receiving case management services, too. They also said other services at the building — such as trash pickup — have become nonexistent.

Last year, federal housing officials told The Banner that they would be inspecting the Section 811 apartment buildings. According to HUD’s inspection database, the three properties underwent inspections last year, and only one received a passing mark. Lakeview earned the lowest of the three scores — a 49 out of 100 possible points.

Carolyn Johnson, managing attorney for the Homeless Person’s Representation Project in Baltimore, represents two tenants in the Lakeview Avenue apartment building. She said HUD has not provided clear answers about its plan for code enforcement at the three properties.

“These are supposed to be housing projects where the tenants also get services, but who is providing the services?” Johnson said. “No one is communicating with them [the tenants], even just communicating what their rights will be. … and it’s causing a lot of unnecessary stress and anxiety.”

Johnson said federal officials may be moving slowly so they can properly identify adequate, next-best options for tenants. An affordable housing shortfall in Baltimore and throughout the rest of the country likely has strained HUD’s work, she added, and there are few providers like AIRS willing to take on such complex work.

“It’s a mess,” Johnson said. “It’s hard to tell someone to stay in a property that doesn’t feel safe, but we don’t want to lose people, either, because they might not get what they’re entitled to if they leave.”

hallie.miller@thebaltimorebanner.com

Hallie Miller

hallie.miller@thebaltimorebanner.com

Hallie Miller covers housing for The Baltimore Banner. She's previously covered city and regional services, business and health at both The Banner and The Baltimore Sun.

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