Caught in the middle Living in limbo Home, sweat home Housing upheaval.

Byline: Susan Palmer The Register-Guard

For the past 21 months, Oregon Housing and Community Services politely requested and then sternly demanded that a Eugene landlord comply with federal housing regulations at an apartment complex where the government helps pay the rent for low-income elderly tenants.

When landlord Max Liebreich failed to satisfy the state's demands, they withheld his September subsidy for Country Club Manor, an apartment building housing 20 senior citizens. In response Liebreich demanded full-market rents from his residents and threatened those who couldn't pay with eviction.

Since lawyers representing both sides got involved this month, the concern that tenants might be evicted has eased, but Liebreich, who co-owns the building with his brother Howard, has yet to sign a settlement agreeing to bring the complex into compliance with U.S. Housing and Urban Development rules.

State officials say negotiations over the language of the settlement are continuing.

The ultimate sanction - canceling his contract - is unlikely because it could leave the Country Club residents without a home and unable to find new ones.

The demand for subsidized housing in Oregon exceeds the supply. There are long waiting lists of people who qualify but can't get into apartments. And the long-term outlook for such housing isn't good. Many contracts between HUD and landlords will expire in the coming years, leaving low-income tenants even fewer options.

"We're barely keeping up at all with the need," said Bob Gillespie, housing division administrator with Oregon Housing and Community Services, the state agency that oversees affordable housing and manages contracts between landlords and HUD, the federal agency that helps pay the rent.

The federal subsidies, known as Section 8, pay about 70 percent of the rent for people whose income falls below 50 percent of the local median wage.

Oregon and HUD have been able to renew low-income housing contracts with about 80 percent of the state's projects, Gillespie said. But that still represents a net loss of low-income housing units here.

And while those who live in apartments that revert to market-rate housing are all eligible to receive individual Section 8 vouchers, the vouchers are no guarantee of housing.

In Lane County, there are 1,590 families with such vouchers on a waiting list to get into Section 8 housing, said Larry Abel, deputy director at Housing and Community Services Agency of Lane County, the local public housing authority.

The waiting list got so long the housing authority stopped taking names in October 2005. People who applied back in August 2004 are just now getting into housing, Abel said.

Living with uncertainty

Dorene Wendt and Cari Vaughan never thought they'd end up living in Section 8 housing.

Wendt was married and raised five children. She worked without pay for years as a bookkeeper at her husband's auto repair shop. But then the couple divorced, and she had to make her own way.

She worked for 10 years as a cook in the University of Oregon dorm kitchens, and then retired on Social Security and a small pension.

Things were fine, though not plush, because she owned her condominium and was able to meet all her expenses. Then five years ago, she was the victim of identity theft and had to sell the condo to pay off the bills racked up by the thief, she said. Those losses upset her delicate financial balance.

Vaughan was once married to a Navy officer who later became a dentist. She raised two children and lived an upper-middle-class life, and even drove a Porsche. But her marriage faltered and she divorced. She supported herself with a series of secretarial jobs, but at retirement her Social Security didn't stretch all the way around the bills.

The two women are neighbors at Country Club Manor, and on a recent afternoon sat in Wendt's small, neatly furnished apartment describing the change in their circumstances.

"You have to understand, when you get older, the one thing you don't want to do is be a burden," Vaughan said.

To avoid burdening their children, the women sought help in the form of the HUD subsidy. The amount of their subsidy is based on their income and expenses, and that requires them to give a regular accounting of both to their landlord.

Liebreich knows many of the most intimate details of their lives. To calculate their portion of the rent, he sees their bank statements, their medical bills, their prescriptions.

"It's an invasion of privacy like you've never had in your life," Vaughan said.

And if they inherit a little money or otherwise come upon a windfall, their rent goes up.

"You can never get ahead," Wendt said.

Still, Wendt, who has lost most of her sight to macular degeneration, likes living at Country Club Manor. She likes the neighborhood because she's familiar with it. She can walk to nearby stores, find her way to a bus stop if she wants to go farther afield, and believes that the area is a safe place for her.

"I don't want to move," she said.

But Wendt and Vaughan, like the other residents, are stuck in limbo, waiting for a resolution of the dispute between their landlord and housing officials.

They've tried to pay their September rent, but Liebreich keeps returning their checks, insisting that they pay the full market rate. Liebreich has threatened them with eviction, and although no formal eviction steps have been taken, the state has advised tenants to get legal representation.

Some of Country Club's residents are mad at Liebreich. Others think the government is to blame, said Audrey Plummer, a 16-year resident at Country Club Manor.

"They didn't come through with the check," Plummer said. "He has to have money to pay his bills. I have nothing against Max. When I needed something repaired, he repaired it. He's kept the apartments up. The ones that seem to be complaining are the ones that haven't lived here very long."

When Plummer got the letter demanding the full $623 in rent, she paid it, even though doing so cleaned out her savings account. She believes that Liebreich will refund the extra to her when his HUD money comes through, she said. But she wouldn't be able to do it again.

"If I had to do it every month, I might not have enough money to pay all my bills," she said.

Jumping through HUD hoops

The state cut off the federal funds to Liebreich after almost two years of letters warning that he had failed to comply with their rules.

A review by The Register-Guard of correspondence between the state housing authority and Liebreich reveals 17 letters sent to him between December 2005 and May 2007 outlining a range of problems, some large, some small. The state says he charged tenants unauthorized fees and failed to turn in financial statements about the property, and didn't maintain appropriate records and waiting lists.

When most of the problems went uncorrected, the federal government stepped in. HUD sent Liebreich a letter in August telling him that he and Country Club Manor had been flagged in HUD files as potentially too much of a business risk.

When he tried to raise tenants' rents in September and then threatened those who didn't pay with eviction, the state attorney general's office got involved and has been working on a settlement.

The state wants Country Club Manor in compliance with HUD rules, refunds given to tenants who have paid excess rents and a new manager to interact with residents.

They say Liebreich's effort to raise rents and his threats to evict tenants violate HUD policies and landlord-tenant laws.

The Liebreichs' lawyer did not respond to a request for comment, and the brothers did not respond to an interview request made through their lawyer.

The dispute doesn't surprise Jim Grow, a staff attorney with the National Housing Law Project, a nonprofit law firm that works on affordable housing issues around the country.

Cat fights between landlords and HUD over paperwork or building maintenance aren't all that unusual, Grow said. Sometimes HUD will look the other way. Sometimes the agency will go overboard in enforcement, he said.

"A lot of these owners are in a situation where unfortunately it's become a game of chicken where it's not clear who's going to blink first," Grow said.

Grow, whose office is in Oakland, Calif., recently represented Section 8 tenants when a landlord tried to raise their rents, then threatened eviction after negotiations with HUD on a renewal contract broke down.

"He tried to move against the tenants," Grow said. "We had to sue in federal court to get an injunction."

Grow said he wishes that HUD would do more for tenants in such cases.

"It ought to be the federal government taking action to make sure these tenants are protected and not having to scramble around and worry for months on end as the contracting parties do battle," he said.

INSIDE

Section 8: A primer on low-income housing subsidies / A15

CAPTION(S):

Cari Vaughan (left), a resident of Country Club Manor, and friend Carmen Melevin chat at a bus stop on Cal Young Road near Vaughan's apartment. Don Mincks plays bingo with Dorene Wendt at Country Club Manor, where rent issues have residents concerned about their future. Dorene Wendt walks by Sheldon High School students on her way to do some shopping. The Country Club Manor resident, who is legally blind, vows she won't let the eviction notice she received worry her. "I don't want to move," she says.