The following article by Alec MacGillis was posted on the ProPublica website August 18, 2017:
Democrats from the state’s congressional delegation say articles by ProPublica, The New York Times Magazine and The Baltimore Sun raise “very serious and troubling concerns” about whether Kushner’s businesses comply with federal housing standards.
Maryland’s two U.S. senators and four of its U.S. House representatives, all Democrats, sent a letter today to the large real-estate company owned by the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser, demanding information about the company’s management of 17 apartment complexes it owns in the state.
The letter to Kushner Companies came in response to a May 23 article co-published by ProPublica and The New York Times Magazine investigating management practices at the rental complexes, most of which are in the suburbs of Baltimore, as well as an article this week in The Baltimore Sun that revealed additional details.
The original story described the highly aggressive legal tactics that Kushner Companies has used to pursue tenants who owed back rent or had left their leases early — even tenants who left the complexes well before the company bought them in 2012 and the years following. In many of the hundreds of cases brought by the company, it pursued tenants in court for years, with late fees and court fees expanding the claims to amounts far above what was initially owed.
The article reported several instances in which the company sought payment even when tenants were able to provide proof that they had followed the terms of the lease. The article also described the shoddy upkeep of many of the complexes’ roughly 9,000 units, where problems such as ceiling leaks, mice and mold are rampant.
The Sun article this week reported that in 105 instances, the company went so far as to seek the civil arrests of tenants who failed to appear in court to address allegations of unpaid debt — more than any other landlord in the state over the same period. Court records show that 20 former Kushner tenants were in fact detained, the paper reported. The paper also disclosed just how dependent the company’s complexes are on federal housing vouchers for rental revenue. While many of the complexes’ tenants pay their own rent, the paper determined that at three of the complexes alone, the company has received $6.1 million in federal rental subsidies since Jan. 1, 2015.
In their letter, Maryland Sens. Chris Van Hollen and Ben Cardin and the four congressmen — Elijah Cummings (the ranking Democratic on the House Government Oversight Committee), Dutch Ruppersberger, John Sarbanes and Anthony Brown — note that the company’s reliance on subsidies from the Housing Choice program (Section 8) obliges it to follow Department of Housing and Urban Development rules. Under Housing Choice, each “dwelling unit must pass the program’s housing quality standards and be maintained up to those standards as long as the owner receives housing assistance payments.” The rules specify that each “dwelling unit and its equipment must be in sanitary condition” and “must be free of vermin and rodent infestation.”
“If [the news reports] are accurate,” the six members of Congress wrote, “they raise very serious and troubling concerns about whether Kushner Companies and its subsidiaries are complying with HUD’s housing quality standards to ensure the safety and health of their own tenants.” The letter also cites from ProPublica’s report that the complexes require tenants to go to a Walmart or Ace Cash Express outlet every month if they want to pay their rent by money order, a process that comes with an extra fee.
The letter asks the company to turn over by Sept. 8 copies of any housing assistance contracts it holds with HUD or any public housing authority in the state; the standard lease agreements for all its complexes in the state; all notifications from HUD, public housing authorities, inspection companies or local jurisdictions identifying defects in the complexes in the past three years; all complaints from residents about maintenance and repair issues over the past three years; any notifications about elevated blood lead levels affecting any tenants; and any agreements with vendors regarding the fees that residents get charged to pay their rent by money order.
The letter also seeks information regarding the role played by Jared Kushner, who was instrumental in purchasing the complexes but stepped down as the company’s CEO when he took on his senior role in the White House. Kushner retains his ownership stake in the partnerships that hold the complexes, and has, according to the White House, recused himself from any discussions around Section 8, which is targeted for cuts in Trump’s proposed budget.
The letter seeks all communications between the company and the White House, “including but not limited to communications regarding the management and resolution of Jared Kushner’s conflicts of interest,” all documents describing the company’s policies to manage conflicts of interest involving Kushner, and all communications between him and the company since the inauguration.
In a written statement, the company did not say whether it would provide the requested materials.
“We are in compliance with the requirements of the Federal Housing Choice Program,” said its general counsel, Emily Wolf. “We exercise our legal rights under the relevant provisions of Maryland law only as a last resort after all other reasonable attempts to collect rent payments are unsuccessful.”
View the post here.