what went wrong blog

Tag: Foreclosures

Slumlords in New Haven taking Section 8 cash

Tuesday, November 8th, 2011 

Hole in Nicole Dennis' wall

Photo by Neena Satija.

Diamond Properties Managment told Nicole Dennis and her family not to cover up this hole because maintenance would do it. They haven't.

Loose lending standards over the past decade had many implications, not just for the average homeowner but for those who used them to exploit others. Such is the case of two landlords highlighted in an investigative piece by Neena Satija in the New Haven Independent

Poverty landlords Janet Dawson and Michael Steinbach found a way to make money in the recession—stop paying the bank, let properties deteriorate, but continue collecting tens of thousands of dollars a month in checks from New Haven’s housing authority.

The Housing Authority of New Haven (HANH) is sending Section 8 federal rent subsidy checks to Dawson’s and Steinbach’s various corporate entities for at least 73 rental apartments according to HANH. That amounted to nearly $80,000 paid out by HANH to the two for the month of October alone.

Meanwhile, lenders are foreclosing on their homes across town. And even though Dawson and Steinbach stopped paying their mortgages on the properties, that hasn’t stopped New Haven’s housing authority from continuing to send them rent checks.

Tenants continue to live in some of the buildings being foreclosed on. They pay their portions of rent to the landlords, too.

And another arm of government, City Hall’s Livable City Initiative (LCI), was chasing after Dawson and Steinbach to make sure their buildings were safe.

Call it one of the more curious side stories of New Haven’s foreclosure crisis—how problem landlords can get mortgages to fix up houses that remain blighted, stiff their lenders, yet continue to rake in government cash.

When a property fails inspections, tenants may be asked to move out. But a tight rental market and the vulnerability of Section 8 tenants often leave them with few options. 

The tenants who live on the second floor are also Section 8 tenants, through J D’Amelia and Associates. Nicole Dennis, Dennis’s boyfriend, and their six kids have been trying to move out for years, but are having trouble finding another four-bedroom apartment, they said.

The kids in the family don’t walk to the bathroom; they run. That’s because the floor outside the bathroom slopes so sharply downward that smaller people can’t help but pick up speed when they approach.

“In my opinion they should just tear the whole thing down,” Dennis said. She has holes in her walls from rats that chewed through and vents that Diamond’s maintenance staff apparently removed and never replaced.

Read more of the investigation in the New Haven Independent.


What Went Wrong

Donald Barlett and James Steele are revisiting America: What Went Wrong, their landmark 1991 newspaper series, in a new project with the Investigative Reporting Workshop. Over the next year, the project team will examine how four decades of public policy has shaped America's ongoing economic crisis.


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