Wax the car, sand the deck, paint the fence...

I originally wrote the following for a manuscript I have in development on stopping evictions during Covid-19. But it’s too much of a deviation from that topic, and had to be removed. So I am posting it here as kind of a stand-alone blog and tribute to a great advocate and mentor. Without further ado…

 

I first met Jim Grow toward the end of 2007, when I was working at the Northwest Justice Project in Seattle. He called me on the phone to talk about a case called Hendrix v. Seattle Housing Authority.

 Shortly after moving to Seattle in 2005, I discovered that Seattle Housing Authority (or “SHA”), the city's public housing agency, had been systematically expelling families from its housing programs without due process of law. That is, if SHA decided to evict a family from public housing or revoke the family’s rent subsidy, there was a right to a hearing at which to contest the termination—but SHA had retained a man with no meaningful training or legal skills to preside over and decide those cases. And because that hearing officer lacked the training and legal skills, SHA instructed him not to consider any “legal arguments” that tenants might present. He did as instructed.

SHA’s arbitrary omission of tenants’ arguments and defenses rendered their hearings utterly meaningless, failing to afford the due process rights to which families facing the loss of their homes were entitled. Through public records requests, we discovered this was a systemic, recurring problem: over 270 families had been evicted or expelled from SHA housing programs through these sham hearings. It was an outrage, and addressing it entailed a multi-year campaign of civil rights litigation.

One major component of that litigation campaign was a federal lawsuit, Hendrix v. SHA. We’d brought the case seeking to enjoin SHA from hearing new housing voucher termination cases until they’d corrected their hearing procedures and hired new hearing officers with the training and skills to consider and evaluate tenant defenses. The judge in Hendrix issued a favorable ruling in November 2007, essentially rejecting SHA’s contention that “legal arguments” were inappropriate at voucher termination hearings, and allowing our case to go forward.

The favorable decision in Hendrix had been easily the most significant accomplishment in my legal career to that point. Though SHA’s practices were extreme, housing authorities across the country were notorious for violating tenants’ due process rights—whether through ersatz hearings and biased hearing officers like at SHA, using procedural tricks that kept tenants from even having hearings at all, or sometimes by simply ignoring or disavowing a hearing decision that didn’t go the housing authority’s way. So having a federal judge issue an opinion confirming that such practices were wrong and violated the U.S. Constitution, and recognizing a tenant’s right to actually hold the housing authority accountable in court, was a major win. 

The ruling would provide the bargaining leverage we needed to negotiate a far-reaching consent decree[1] with SHA to reform its hearing practices for voucher tenants, critically ensuring that tenants could raise any pertinent argument or defense, and that new, legally-trained hearing officers would be hired to preside over all future voucher cases.

 And yet winning a major housing due process case isn’t like winning the Super Bowl. There is no trophy presentation or city parade. A good percentage of U.S. adults have likely heard the term “due process,” but probably very few could accurately describe what it means or stands for. Federal housing programs are not well known, and few other than lawyers might ever give a second thought to the importance of administrative hearing rights in such programs. There is no fanfare; constitutional rights in housing just don’t capture the popular imagination like carrying an inflated pigskin across a white chalk line. The most there ever is a call from Jim Grow at the NationalHousing Law Project, looking to discuss his reading of the court’s opinion, and the idea that the due process rights of housing voucher tenants might be even more expansive than lawyers commonly believed.

 

I was glad to make Jim’s acquaintance that day. Because about seven years after the Hendrix case, I began representing an organization of tenants living in a north Seattle building called the Theodora, a HUD-subsidized property for disabled tenants. The property had recently reached the end of a 50-year “Section 202” mortgage, which had required the owner to keep the property affordable to qualified low-income residents. But that obligation expired with the mortgage, and now the owner planned on selling the Theodora to a developer for conversion into luxury apartments. 

Such “housing preservation” cases can be bewildering, requiring an understanding of affordable housing finance, knowledge of various obscure laws that might be leveraged to slow down or ultimately derail a pending sale, an ability to navigate complex ethical and regulatory obstacles and represent groups of residents whose objectives may or may not uniformly align, and in this particular case, advance a fair housing theory that requiredstatistical proof of discrimination (i.e., that the planned sale and redevelopment would substantially diminish housing opportunities for people with disabilities in the vicinity, an outcome the seller could avoid by conveying the property to a preservation-minded buyer instead). 

Without Jim we wouldn’t have stood a fighting chance. Few front-line legal aid attorneys spend much time thinking about how commercial housing deals are structured, and I was no exception. I had even attended multiple training presentations on the subject dating back years, but without many opportunities to make use of the information it never really took. I had no idea how to handle a complex housing preservation case that. Jim did.

An affordable housing project has certain “capital needs” costs, Jim explained, mainly the price of the land and the construction or rehabilitation needs of the building. Then, once the housing project is up and running, there will be operating costs—the amounts needed to pay the staff, maintain the physical plant, service the debt, and so on. For a project to be feasible basically required enough up-front money to meet the initial development costs and, once in operation, taking in enough rent and subsidy payments to cover the project’s operating costs.

That was simple enough. But I also didn’t have any idea how to figure out what those numbers actually were in connection with any particular project. The acquisition costs and capital needs for the Theodora I knew because we had obtained figures from the already-planned transaction through discovery in the lawsuit. But those numbers just showed how much a preservation buyer would need to pay if they wanted to match the existing offer on the Theodora—not how much they could afford or where the money might come from. Again, Jim knew. “Talk to some nonprofit developers in your area,” he recommended. “See if there are any interested in the project.”

It turned out that numerous Seattle-area nonprofit developers were interested in the Theodora. The property was in Wedgewood, by then an impenetrably cost-prohibitive area to place new affordable housing. Executives from four different affordable housing providers signed affidavits describing the building’s importance as a rare asset for meeting the housing needs of low-income Seattle residents, and people with disabilities specifically, in high-cost northeast Seattle. Each explained that the sale caught them off-guard and they’d likely have bid on the property if given the chance. But the seller had inked a deal with Goodman Real Estate, a for-profit entity known for voraciously scooping up the area’s aging affordable housing with no concerns for the futures of current residents, before the nonprofits ever had a chance. 

The only problem seemed to be that the highest price any of the nonprofit developers could have afforded to offer for the Theodora was about $6 million—and the seller’s contract with Goodman was for $7 million. That left what affordable housing developers call a “gap.” Either the price had to come down, or more money would need to come from somewhere to fill it—otherwise a preservation deal wouldn’t work even if we could force or negotiate one through the litigation.

We knew a sale to a preservation-minded buyer could have required the seller to discount the price; by how much, we didn’t know at the outset. But now we knew, and it was the difference between the $6 million the nonprofits knew they could come up with, and the $7 million that Goodman was willing to pay. How might a $1 million gap be closed? Again, as a guy who concentrated on the nuances of individual tenant matters like housing admissions or eviction proceedings, I hadn’t the faintest idea. 

Jim, on the other hand, had plenty of ideas. Money isn’t easy to come by in the nonprofit world, but those who look hard enough can often locate various sorts of strange, hard-to-access funding opportunities—tax credits, federal contracts, state bonds, small pots of federal appropriations that nobody ever qualified for. If there was money out there the nonprofits had missed, or that they might qualify for with some tweak in the laws, then they might be able to close the gap—at least part of the way. Otherwise, the only way to bring the gap down would be for the seller to sell the property for less. 

Expecting a seller to simply take less money might ordinarily have seemed out of the question. But here, the seller was itself a nonprofit organization. The seller would clear at least a $2 million gain on the sale to Goodman, and had already committed to investing the funds in some other unspecified manner to help people with disabilities in the Seattle area. But they didn’t have a plan for what that help would be. Leaving some of that anticipated profit on the table to allow preservation of the Theodora seemed to us quite a logical way to help Seattleites with disabilities.

 Sadly, in the end we were not able to identify any specific sources of additional capital that the non-profits could have received So to fill the financing gap in a preservation plan would have required the seller to discount the price by the entire million dollars. Jim thought that was too far, and all I could do was shrug. We’d hoped, if we made a formidable enough showing, that Goodman might agree to set aside a handful of affordable units in exchange for giving up our snowball’s chance. But they weren’t up for negotiating, so we just had to take our best shot in the courtroom and hope the federal judge saw things our way. 

He didnot.  Even though the seller was a nonprofit, the judge ultimately ruled, maximizing its profit on the sale of the Theodora was a sufficiently strong business reason to sell to Goodman as to justify displacing its disabled residents.

The effort to save the Theodora was not successful. But to the tenants who’d organized and fought to save their homes, the case had been deeply meaningful and well worth the effort despite the outcome. I was proud of the effort, happy to have served the clients, but disappointed with the result. 

With Jim’s help I’d touched the rim on a higher level of legal advocacy.  And yet I’d only touched it—I certainly couldn’t dunk yet. I didn’t want to just be the well-meaning legal aid guy in way over his head, but with the case having ended in a ball of fire we only hoped wouldn’t make the Federal Supplement,[2] I had to admit that’s what I had been. 

I wanted to be the expert national guy with all the answers. I wanted to actually win those cases. I wanted to learn the ways of the force and become a Jedi like Jim Grow. 

 Six years later I was trying to stuff a Napa cabbage into a plastic sleeve in the produce section of New Grand Mart when my cell phone rang. It was Jim, calling on a Saturday afternoon and wondering why I hadn’t been checking my NHLP email.

“Grocery shopping,” I answered, fumbling the half-bagged cabbage back into the display.

A mild chuckle suggested Jim could actually sense my one-handed shopping struggles from his shady back yard in Oakland. At least it was a good enough excuse. “Well,” he said, “When you get home, check it. Congressional staff is trying to reach you about the national eviction moratorium.”

😎 

 

 

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[1] A “consent decree” is a type of legal settlement that is judicially approved and entered as a court order, so that the decree may be judicially enforced (i.e., violations constitute contempt of court).

[2] The Federal Supplement is a series of legal case reporters published by West Publishing, which contains important federal district court opinions issued since 1932. Though not binding on other courts, opinions that appear in the Federal Supplement tend to receive greater deference from fellow judges than non-published opinions.