Lost rent. Botched ledgers. Tenants accuse Milwaukee Housing Authority of pattern of mismanagement

Nathaniel Rosenberg and Talis Shelbourne - Milwaukee Journal Sentinel 8/30/2023

Jeffrey Smith started chemotherapy in May to treat his recent diagnosis of bladder cancer.

But as a resident of the Milwaukee Housing Authority's Holton Terrace, he is also facing another battle.

When Smith quit his job as a cleaner in 2020 and began receiving disability payments, he went to the housing authority's rent assistance office to fill out paperwork showing his income had changed so his rent could be adjusted accordingly. He began paying $280 a month, instead of the $377 he previously paid.

Smith has lived in public housing since 2017. He had gone through the process before — adjusting his rent whenever he switched jobs or reduced his hours.

But this time, the housing authority did not record the change or lower his rent.

From June 2020 to May 2021, Smith’s rent ledger shows him paying $280 every month but racking up a debt of more than $2,000 because his rent obligation was never adjusted down. As his debt accumulated, Smith says he was not notified by the housing authority until a new building manager came to Holton Terrace nearly two years later, in February 2022. That building manager handed him an eviction notice for the debt last December.

For a disabled, low-income tenant like Smith, it came as a shock.

“I’m paying my rent from month to month, and nobody told me that my rent was supposed to be (different)?” Smith asked. “Whose fault was that, mine or yours?”

Smith is one of many residents calling out the Housing Authority of the City of Milwaukee (HACM) for what they say is widespread negligence with its accounting practices, causing financial and emotional distress to its mostly low-income, elderly or disabled renters.

Three of the six tenants who spoke to the Milwaukee Journal Sentinel about their concerns said the housing authority appeared to have lost their rent checks, twice leading to eviction notices. Four of the six reported being charged confusing or incorrect late fees, some of which were later attributed to computer errors. And two tenants described unknowingly racking up thousands of dollars in owed rent without any notification from the housing authority.

Many of the residents have been working over the past year with Common Ground — a coalition of faith groups, local businesses and other organizations — that has been advocating for people in public housing.

At a community assembly on Monday, Common Ground leaders characterized the issues as part of a pattern of dysfunction at the housing agency. The group is calling for an independent investigation into HACM.

“They’re doing a public service, and using a lot of public money to do it,” said Common Ground executive director Jennifer O’Hear. “There should be accounting standards. There should be a duty to the residents not putting them through undue distress, or an undue burden of proving and documenting stuff. It’s just ridiculous.”

In a statement, HACM spokesperson Amy Hall said the agency's "primary goal is to keep people housed." She said the agency continues to invest in new technology to offer tenants additional ways to pay rent and communicate with property managers.

"We provide multiple ways to resolve any issues, such as outstanding balances," Hall wrote.

She added: "Residents should contact HACM when they have concerns, and we will work with them to try and resolve issues in a timely manner."

Tenant threatened with eviction after check goes missing

Michael Price, 62, has lived in southeastern Wisconsin for most of his life, where he drove freight trucks before his career was cut short due to an accident that left him on disability.

In 2021, he moved into an apartment in Lapham Park, an affordable housing development on North 6th Street that gives preference to the elderly and disabled. The subsidized rent was appealing to Price, who is on a fixed income and undergoing treatment for cancer.

Demand to get into one of HACM's 4,000 public or affordable housing units is high. To qualify, people have to meet income qualifications: $55,950 or less for a single person or $79,900 for a family of four.

Tenants in HACM housing are generally only required to pay 30% of their income on rent, with the rest being covered by the housing authority. In a city where half the residents are “cost burdened,” this public assistance can be the difference between stability and homelessness.

More:Low-income households in Milwaukee squeezed by rents

From the day of his move-in, Price maintained a spotless payment record on his residential ledger, an electronic record that HACM uses to track tenants' rent payments and debts.

Price described traveling to a nearby check casher each month to get a money order for his rent payment, taking photos and holding onto receipts for his own documentation, then hand-delivering the payment to the front office in Lapham Park.

On Feb. 2, Price submitted his money order with the front office as usual.

Then something went awry. On Feb. 20, Price said he returned to his apartment to find a 30-day notice slid under the door. The notice told him that he owed HACM more than $400 — his February rent — and warned that he needed to pay that amount plus the late fee, or leave.

Price said he brought documentation of his rent payment to the front office, where the administrator initially said there was nothing she could do. But eventually, she found a record of his payment and called him to let him know he was no longer facing eviction, Price said.

Still, Price found the whole ordeal frightening and unnecessary. He worries about other tenants who don't keep meticulous records like he does.

“I didn’t feel good,” Price said. “What if I wouldn’t have had proof I paid? They were forcing me out of here with no money.”

In a statement, Hall declined to discuss specific residents' cases, citing the confidentiality of resident information. In general, she said the housing authority "only issues notices to comply or vacate the premises as a result of conduct and/or failure to pay rent."

"If there were issues, they have either been resolved, are in the process of being resolved, or are pending potential legal action," Hall wrote.

Ex-manager says problems from pandemic were allowed to fester

Some of the claims raised by tenants have been backed up by former employees.

Savella McLaurin worked as an office assistant at HACM for nine years before she was promoted to manage the Merrill Park building in 2021.

During that time, McLaurin said she watched the organization’s rent collection practices, and subsequently, relationships with the tenants, deteriorate firsthand. Among other things, she said she observed tenants being charged incorrect late fees and sometimes being served eviction notices based on erroneous ledgers.

But according to McLaurin, when she reported to superiors the ledgers were incorrect, they told her to tell residents they were being worked on.

Moreover, McLaurin said she did not know how to fix the ledgers because she was never trained when she was promoted to building manager.

"(They know) people are being charged wrong, they’re being charged extra; they know all this. But nobody was given direction or took time to say, we need to get this done."

"Isn't that crazy?" she said.

McLaurin said she resigned in June 2022 because she no longer felt the institution was serving residents.

HACM has disputed many of McLaurin's claims, stating that it has quality control policies and procedures in place to address discrepancies in rent statements. Hall said the housing authority has established onboarding processes for all new employees and provides ongoing training to all staff.

In an interview on Monday, Hall also said the agency has been transitioning to a new software system, "so some of the rent issues stem from that."

'Ashamed to go out the door '

While Price managed to avoid financial penalties, other tenants aren’t always so lucky.

Rebecca Davis has lived in Milwaukee her whole life, raising daughters and granddaughters in the city while working in Milwaukee Public Schools. Davis is disabled — she has a prosthetic leg — and gets by on a combination of disability, social security and food stamps.

She moved into her apartment in Becher Court in December 2021, drawn by the promise of cheaper rent.

Almost immediately, irregularities and errors began showing up in Davis's HACM ledger. The mistakes included multiple incorrect late fees that were reversed, as well as a charge for $372 that was also reversed. HACM staff left note in Davis's file saying the $372 charge was "posted to the wrong ledger."

While HACM had leeway to make and correct mistakes with rent collection, Davis was afforded no such luxury.

In March 2022, Davis paid her rent check, but says it was not immediately cashed. When the check bounced in May, she was promptly hit with an eviction notice.

The notice, which she says she found tacked to her door, devastated Davis, who had just arrived back in Milwaukee after the death of a family member.

She repeatedly broke down in tears trying to express the helplessness she felt trying to fight the eviction.

“It made me so depressed that I was talking about killing myself,” Davis said.

“I’ve never been late on any of my rent, I have never had an eviction. I was ashamed to go out the door.”

The Legal Aid Society of Milwaukee was able to help her work out a payment plan with HACM to stay in the apartment. As of May, Davis had completed her payment plan and paid off her debt. But she says the humiliation remains.

“It’s really terrible,” she said. “I didn’t know they (targeted) elderly people like that.”

Tenant still seeking credit for rent payment from 2019

Other tenants like Daniel Freiberg did not receive an eviction notice, but said the ordeal of correcting the housing authority's mistakes was still draining.

Freiberg moved into a townhouse in the Southlawn housing complex on Milwaukee’s south side in May 2019. A former county employee, Freiberg has used a walker since a car accident shattered his hip in 2013.

The trouble started a few months after moving in.

Freiberg paid his August 2019 rent early, on July 19, to try to stay a month ahead on rent payments and avoid late fees. According to him, his bank records show that the check — nearly $700 — was cashed.

But according to his HACM ledger, it never existed.

For the next four years, on over 50 checks, Freiberg consistently paid his rent a month in advance, even noting in the memo line which month's rent he was paying for. But according to his ledger, the money was not applied to the month he specified, but to the month before. Freiberg was unaware of this practice.

Things reached a breaking point in December 2022, when Freiberg says he was told by the Southlawn administrator that he was one month behind on his rent. His latest check that was meant to cover rent for January 2023 — which the housing authority would have applied to the month of December — had apparently not arrived, even though Freiberg said he mailed it on time.

It was only in the process of resolving his December rent, with supporting evidence from his bank and his ledger, that Freiberg discovered he had spent four years having his rent checks applied to the wrong month.

Freiberg canceled the check, but in a strange twist, he says the the housing authority still tried to cash it in April. (Freiberg believes the housing authority simply lost his check.)

He is still trying to get credit for the month of early rent that he paid.

Freiberg believes his case is part of a pattern of negligence and mismanagement at the housing authority.

“I would love to see HACM held accountable," he said. "They're dealing with elderly, disabled and low income people.”

Freiberg said the effort of proving his claims has been exhausting. The retiree said he frequently walked a mile to the bus stop, with his walker, to get to the library to work on his case. He said the housing authority has been unhelpful and uncommunicative throughout the process.

“This situation has caused me a lot of emotional pain and physical pain,” Freiberg said.

Lawyer says housing authority slow to respond

For Smith — the Holton Terrace resident who was was suddenly informed about owing more than $2,000 in unpaid rent — the incident wasn't the only problem on his ledger.

In July 2020, his ledger showed the housing authority failing to pay its portion of his rent and charging it instead to Smith. In April 2022, the ledger showed Smith being assessed a security deposit of $397, more than five years after he moved into the building and paid the deposit.

And between March 2022 and January 2023, the ledger showed Smith paying rent on time but being assessed nine separate late charges, for a total of $270.

Smith is now working with Legal Action attorney Niabi Schmaltz to resolve his case.

Schmaltz said her review of his records suggests the housing authority's rent collection practices were strained by the pandemic and then snowballed.

She said it is common to wait weeks or even months for a substantive response from HACM to her inquiries about Smith or other clients in public housing.

“It's (frequent) enough to be concerning, and enough to establish patterns of mismanagement that we are concerned about,” Schmaltz said.

Smith, who has been undergoing chemotherapy treatments, says he would like to move out of Holton Terrace as soon as Schmaltz and the city resolve his case and clear his debt, removing the threat of eviction hanging over his head.

"Every time I pay my rent, (the manager asks), ‘You know you need to start paying on that bill,'" Smith said. "And I told her, I’m not paying on nothing, because I don’t owe."

“I’m ready to get out of this building," he said.