Condemned: Greensboro struggles with housing code enforcement

Written by Eric Ginsburg // Photos by Amanda Salter

A child’s tricycle rested eerily just outside of an apartment door with a large, yellow warning sign plastered to its center: Condemned.

The creepiest thing about apartment complexes like this one, at the corner of Lowdermilk Street and Dakota Drive in east Greensboro, is that save for the signs, it’s almost impossible to tell which units are occupied and which ones the city shut down due to unsafe living conditions. At a different apartment in the same complex, where seven units are condemned, a child peered out from behind a glass door, one unit down from an apartment with boarded-up windows.

The city at one time had a strong housing code enforcement tool called the Rental Unit Certificate of Occupancy that enabled it to compel inspections prior to occupancy as a way to protect tenants against landlord negligence. In 2013, the state legislature gutted the law, which City Attorney Tom Carruthers said “greatly restricted” the city’s abilities to regulate housing. Concerned about ensuring safe housing — a necessary role outlined in the city’s codes since at least 1961 — Greensboro City Council moved to find a solution.

What they found turned out to already be on the books: a 2009 ordinance they clarified and refined in 2013 allowing for stiff penalties for violating the housing code, Carruthers said.

Once an apartment or house is condemned — which requires a threshold of multiple violations — the city begins issuing a $75-per-day civil penalty, and charges $200 for each re-inspection, Code Compliance Coordinator Beth Benton said.

“This is new territory for us,” she said.

Benton, who used to run her own home-restoration business, has more than 800 active cases, though she points out that 142 of those are at the now infamous Heritage House.

More than anything, the city wants to help those property owners who are willing to fix properties and actively working to do so, Benton said, because compliance — not fee collection — is the goal.

The fine structure is new, at least as far as application and enforcement go, and is designed to compel cooperation rather than exact punishment, she said.

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Even though more than $700,000 is already owed in outstanding fines, more than 60 percent of it is due to just one family.

Most of the time, an initial $200 civil penalty gets people’s attention, Benton said.

“It’s a good motivator and it’s given me a good leverage tool, too,” she said.

If that doesn’t work, the $75 daily penalties kick in, and as long as the condemned property isn’t part of a multi-family building with people living in other units, the city has another tool in its pocket: demolition.

“I don’t want to tear them down,” Benton said. “But I will.”

Yet a small group of landlords, each with varying reasons and circumstances, appear unwilling or unable to pay the fines on condemned apartments. Together they’ve racked up a tab in excess of $700,000 in the last year, and the city’s collections rate is abysmal. Now the city of Greensboro is trying to decide what to do about it.

Collections

Once a property owner starts incurring regular fines for being out of compliance, the city collections division takes over. Twice a month, they print out all “accounts receivable” and start making calls, beginning with the highest dollar amount owed, Richard Hawk, an assistant manager in the finance/collections division, said.

If there is no response after staff goes through its regular process, the file is reviewed after 120 days. The city can file a small claim if the amount owed is under $10,000, Hawk said, and anything over that is referred to the city’s legal department.

Zoning fees, re-inspection fees and housing-code civil penalties are lumped together for collections purposes, and there is “no way to specifically break it out,” Hawk said. Still, housing-code violations make up the vast majority of the fines in the category, he said, and the city is considering keeping records differently in the future so that information can be parsed out easily.

No other fine structure in the city incurs daily, Hawk said, meaning that civil penalties — especially if multiple units in a complex are in violation — can accrue very rapidly, he said.

“I don’t know why, but this has been a different animal,” Hawk said.

Between March 1, 2014, when the city’s new fine structure began, and the end of the year, the city billed $683,475 in the zoning, re-inspection and civil penalties category. It collected a paltry $48,500 — just over 7 percent of the amount owed, Hawk said.

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That’s not only a lousy collections rate, but it’s shockingly low in comparison to the city’s overall collections rate. Taken as a whole, the rate on all of the accounts receivable, including housing code violations, is an impressive 98 percent, Hawk said.

Closer inspection of the city’s records, made available through a public-records request, does show the exact amount fined, the type of fine and the date for each property not in compliance. Even a quick review of those fines — once zoning cases are excised from the list — makes one fact abundantly clear: The dismal collection rate is due to just a few bad apples.

Hawk is keenly aware of the fact and isn’t surprised by it.

“There’s only a few debtors that make up a very strong portion of that number,” he said. “I imagine being on the other side of it could be a pretty tough hole to dig out of.”

Despite ignoring the city’s fines, the worst offender is showing some willingness to make repairs, and Benton said progress with some other violators gives cause for hope. And even though the collection rate is minimal, there is some evidence that the process implemented a year ago is working.

The worst offender

By the end of 2014, 11 entities or individuals each owed the city more than $1,000 under the new fine structure. Some were larger institutions like Fannie Mae, that owed $1,475, while others were limited liability corporations or individual property owners. Three owed the city far more than anyone else. With $346,775 outstanding, the Agapion family is at the top of that list, and they have no intention of paying.

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The Agapions collectively own exactly 400 properties all over Guilford County. The majority of properties are in Greensboro, though their real-estate empire covers High Point, Stokesdale, Gibsonville, Pleasant Garden and Summerfield. Different family members own the parcels, with multiple people listed on a lot of different addresses. Of the 400, 103 are primarily attributed to Basil Agapion on the county’s online property index, and 45 are attributed to Sophia Agapion, who co-owns many of Basil’s properties as well.

At least one family member’s properties have come before the Minimum Housing Commission at almost every meeting for the last six months, particularly Basil and Sophia’s shared properties and Despina Agapion Psatha, who owns 40 properties in the county. Sometimes, multiple family members’ buildings appear on the same commission agenda, but Benton has only ever dealt with Irene Agapion.

Irene, a third generation real-estate agent, is the oldest of four siblings and has worked in the industry for 28 years, she said. Her father, Bill Agapion, founded Arco Realty in Greensboro in 1952, and was an early provider of racially integrated housing in the Southeast, Irene said. He still works with her and Basil at the company’s office on South Elm Street downtown near Mellow Mushroom, though Despina, one of Irene’s siblings, lives out of state, she said.

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It isn’t just one or two properties: The city has condemned units or entire apartment buildings around the city. In the last six months, ongoing cases at Floyd Street, Summit Avenue and Emanuel Agapion’s property at 1316 Town Street came before the Minimum Housing Commission. In October 2014, a new case at 1224 Highland Avenue in Glenwood — owned by Despina — came before the commission but was continued until the December meeting. At that meeting, the commission upheld the condemnation order and also heard a new case: Nine units at 2316 Kersey Street in south Greensboro, owned by Basil and Sophia Agapion, had been condemned, but the commission continued the case until its March 10, 2015 meeting.

Irene Agapion said the reason the family has so many housing code violations is a numbers game — with so many properties and family members involved, it isn’t surprising there are some issues, she said, while quickly noting that they are working to bring all the buildings into compliance.

“We’re one of the oldest and largest companies, so I think that just has to do with volume,” she said. “It seems that some day we’ll get caught up. We’re reducing them all the time.”

Irene said the commission’s meeting minutes don’t show that the family handled 11 other cases in the last month, keeping the properties off the commission’s agenda. The family is taking repairs one property at a time, prioritizing occupied units over condemned ones “because we want to protect our tenants,” Irene said.

The housing commission previously agreed to let Irene go building by building to make repairs, cleaning one at a time and not allowing tenants to return to any units until the entire property is taken off the condemnation list, Benton said.

In the meantime other properties, like units at 803 Oak Street near Freeman Mill Road and others at Kersey Street around the corner from Floyd Street, languish. People don’t need to trust the Agapions in order to believe that some progress is being made; the commission’s meeting minutes show change.

Discussion on the 3012 Summit Avenue apartments, scheduled for the commission’s meeting last week, was continued because, “She’s almost done with those units,” Benton said. And 2335 Floyd Street was rescinded from the condemnation list because it was repaired and in compliance, according to meeting minutes.

Meanwhile 2333 Floyd Street, an identical building that shares a parking lot with 2335 Floyd, was on the commission’s February rescind list because it was repaired but Benton pulled it from the agenda because there was a snag with scheduling the electrical inspection in time. It will be heard next month, she said.

“That one’s actually done, it’s just down to the final paperwork is all,” Benton said.

All of the doors and first-floor windows at 2333 Floyd Street were still boarded up as of Monday. It had been continued from the commission’s June, July and August meetings before being upheld for demolition at the Sept. 9, 2014 meeting, triggering a 90-day period within which the owner needed to fix it before it would land on Benton’s demolition list.

Benton said that point in the process is often a good catalyst for owners to bring a building into compliance to avoid demolition by selling or repairing the property, as happened in this case.

A similar cycle occurred with 2335 Floyd, which was also continued from June, July and August before being upheld in September. It was later rescinded in December after repairs to the entire building, and Irene said all but one unit are rented.

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But even though the entire building was supposed to be cleared at the same time, and the inspector’s notes in the city’s online code compliance tracking system says every unit was in compliance, both windows for Apt. F — a unit in the back corner of the building —are currently boarded up.

Many of the Agapions’ outstanding fines stem from Floyd Street and other multi-family buildings where more than one unit is condemned. The accrued $75-per-day fines add up quickly, and have reached such a height that Irene Agapion said they have no intention of paying up.

“That’s such a huge amount of money,” she said. “Our only active plan is to bring all of our properties into compliance. That’s what I’m doing every single day. All of us, we’re all trying to make sure that everything is being done. We all want the best possible outcome.”

Irene said it is possible that the city overstepped its bounds, creating a law that she says isn’t just cost prohibitive and counterproductive, but possibly unconstitutional.

“My thought is that it’s almost unenforceable,” she said.

Most of the Agapions’ fines have been referred to the city legal department, but Irene said her family hasn’t heard anything from legal yet.

Second and third place

The second and third worst offenders, Dogwood Manor Townhomes LLC and Marwan Mujali, owe the city considerably less money — $55,825 and $34,525 by the end of 2014 respectively — but still far more than anyone else.

Dogwood Manor Townhomes, an entity with a listed address on Peters Creek Parkway in Winston-Salem, is responsible for violations for several properties in the 3500 block of North Church Street. Benton said the entity has been receiving bills for violations at the multi-family units, but shows no sign of trying to pay as far as she is aware.

“I haven’t heard anything from them,” she said. “I think communication with them may be going through the city attorney’s office or collections.”

According to the NC Secretary of State’s office, Nathan Tabor is the registered agent for the property and sole manager for the LLC. Tabor, a former chairman of the Forsyth County Republican Party who lives in Kernersville, declined to comment on the record for this story.

Tabor is also the listed agent for Flint Manor Apartments LLC, Ivy Manor Apartments LLC and Regent Manor Apartments LLC. None currently hold property in Guilford County, though Ivy Manor and Regent Manor own parcels in Winston-Salem at 2900 Ivy Avenue and 3900 Bethania Station Road respectively.

Regent Manor Apartments owes $6,736 in delinquent taxes to Forsyth County, according to the county’s website. Dogwood Manor Townhomes owes taxes on both of its Greensboro properties, including $12,516 on its North Church Street property with housing code violations and $11,277 on 3700 Flint St., according to Guilford County tax records.

Tabor is also listed as the agent for Spring Manor Apartments LLC, which owes the city of Greensboro $11,275 for various housing code violations. By the last day of 2014, one fine had already been outstanding for 243 days. The Spring Manor and Dogwood Manor cases have both been referred to the city’s legal department.

The secretary of state’s office also administratively dissolved Flint Manor Apartments LLC — another entity listed to Tabor — last week for failure to file an annual report.

Marwan Mujali, who technically owed Greensboro almost $35,000 by the end of 2014, presents a different challenge for the city; he isn’t alive.

A low-level drug dealer murdered Mujali outside one of his Greensboro properties in April 2013 according to Greensboro police. Now Mujali, whose address was on Stonemill Drive in High Point, owes money for several apartments at the intersection of Lowdermilk Street and Dakota Drive in east Greensboro, just down the road from Lorillard.

Benton said that even though additional units on the multi-family complex have been condemned in the last year, there is cause for hope.

“Often times when a property owner passes, it becomes a nightmare for us,” she said. “Luckily when he passed, he had a will. There is a recorded administrator for the estate. I believe it is his brother. Everything we’re doing automatically goes to the estate. Estates are complicated so we know it’s going to take him a little while to go through the properties.”

In the last month, the family has hired someone to oversee and assist with repairs on the property, Benton said.

“We’re hoping that they’ll be working to get these units into compliance,” she said. “They’re sort of turning the corner.”

Karen Mujali, Marwan’s widow, could not be reached for comment, but it appeared that someone was working on at least one of the units last week.

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The Greensboro Housing Coalition

Jana Raczkowski has been focused on the Agapions’ two Floyd Street properties since she started working at the Greensboro Housing Coalition in May 2012. There’s an entire box under her desk in the Self Help building downtown dedicated to files for the properties, and her computer is overflowing with what seems like an endless supply of photos of housing-code violations at different properties around the city, especially ones owned by someone with the last name Agapion. When the organization takes residents on its Healthy Homes bus tour, Floyd Street is one of the stops, highlighted for its longstanding problems.

Raczkowski doesn’t buy Irene Agapion’s response that the number of violations her family has been cited with is a reflection of its large holdings.

“Why did they get that way in the first place?” Raczkowski asked. “Properties shouldn’t get to the point where they have to be condemned. We all know the Agapions are one of the worst slumlords in Greensboro. It’s not acceptable. The city already gives landlords so much time and so many ways to avoid going to the [minimum housing] commission or being condemned, and the city is so willing to work with you, so a property should never get there.”

When property owners wait to be caught for housing-code violations, they are knowingly endangering the lives of their tenants, Raczkowski said, adding that children live at many of the Agapion properties.

While noting that only 1 or 2 percent of landlords are “the bad actors,” Brett Byerly, the new executive director of the Greensboro Housing Coalition, roundly condemned the Agapions as well.

“What the Agapions are doing is mining human misery for every dollar they can get out of it, and they’ve been doing it for decades,” Byerly said. “They’re raping the equity out of those properties.”

By charging rent and not investing “a dime” into a property, owners turn housing into “a shell of a property” that ends up significantly costing the city when labor for inspectors, collections and other city employees is taken into consideration.

“They’re only reinvesting [in the properties] to the extent that they are forced to,” Byerly said.

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Raczkowski can easily recite horror stories from tenants at multi-family complexes around the city and said that such buildings — especially when some of the units are condemned and others remain occupied — present some of the biggest challenges. Issues such as mold and rats easily spread throughout an entire building, she said, and her photos show everything from serious water damage to cockroach infestations.

But even more broadly, tenants she encounters are afraid to speak up.

“A lot of the tenants do not know that they can complain and have rights, or the process of how to get their landlords to make the repairs,” Raczkowski said. “Or they do know and they are scared to complain due to fear of retaliation from the landlord. We see it all the time.”

That is much of what the Greensboro Housing Coalition does: Help educate people about their rights and advocate for them or broader policy changes to address unsafe living conditions. And Raczkowski’s comments about scared tenants or landlord retaliation aren’t proverbial; people who feel helpless or scared are in and out of the office regularly, Raczkowski said, and they are often immigrants or refugees.

Despite all the problems with landlords, Byerly and Raczkowski are quick to note the positive work the city is doing to address Greensboro’s housing crisis, commending the stiff daily penalties as the “teeth” of the city’s code. And new leadership at the city in recent years, particularly Beth Benton and her departmental director Barbara Harris, is encouraging, Byerly said, adding that he has already seen progress.

A changing Minimum Housing Commission

Much has changed in the two years that Justin Outling has served on the city’s Minimum Housing Commission. Outling — a lawyer who is also a leader in Greensboro’s young professionals group SynerG — joined the commission in January 2013 and became the group’s chair at the end of 2014. In that time, the commission has put significant effort into reducing the amount of time between a condemnation order and a resolution by the commission. That change has occurred in part thanks to the change in the city’s ordinances, he said.

“There was a very large backlog,” Outling said. “We spent much of last year working through that backlog. We were going through it and commission hearings could be six hours long. The time from the initial violation… to getting a ruling has shortened greatly.”

A few cases had previously dragged on in excess of three years, he said, but now the commission is generally making a ruling within a six-month timeframe.

The commission is comprised of volunteers, people who can’t compel city staff to do anything and who have no policymaking power, Outling said. But changing rules and priorities on city council have enabled the commission to function more effectively and efficiently, he said. And the $75 daily fine has been an important part of forward motion for the commission and healthy housing in the city, Outling said.

“It reinforces to property owners that it is very important to the city and that it’s important to bring the property into compliance in a timely manner,” he said. “Before, if you delayed, there was not really a consequence for the delay. There wasn’t an incremental incentive or punishment for property owners, just the ultimate hammer of demolition.”

Some property owners would abuse that fact, Outling said, but the new policy implemented a year ago enables the city to bring the property into compliance as quickly as possible.

Because the commission is a quasi-judicial body, Outling said he couldn’t comment on specific properties or landlords, but said in general the commission looks for clear evidence that a property owner has the intent and a plan to bring a property into compliance before granting a continuance. If a property owner is making a good-faith effort, nobody wants to see a house demolished, he said.

Some of the commissioners are much more willing than he is to grant a continuance, Outling said, adding that clear rules from the city are the best way to ensure equal and clear enforcement.

“I will say there are occasions that I disagree with my fellow commissioners for granting continuances,” Outling said. “There’s a spectrum on this issue.”

Potential policy changes

The city of Greensboro’s new fine structure and housing-code enforcement practices are only now about to turn one year old, but after a briefing of city council at a work session late last month, city staff are exploring possible changes to the city’s approach.

“We’re not satisfied,” City Attorney Tom Carruthers said.

Carruthers prefaced his remarks by lauding Benton as “one of the heroes of the city” because she has been a “driving force behind the improving of housing stock in Greensboro.” But the “unanticipated result” of the new approach — hundreds of thousands of dollars in uncollected fines — needs to be addressed, he said. Carruthers and his department are looking into several potential changes, including consulting with the UNC School of Government about the city’s options on multi-family buildings and eventually the possibility of land-banking after a council member raised the concept. But Carruthers already has one concrete proposal that he feels will improve the problem: Grant the city the ability to waive accrued civil penalties once a landlord brings a property into compliance.

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“We need to provide them an avenue, a door, to walk through to comply with our ultimate goal to improve the housing stock of Greensboro,” Carruthers said. “It’s a reality that we have a shortage of affordable housing in the town right now.”

Especially given that some of the Agapion properties are being brought into compliance, it may be in the greater good to waive fines for those properties and others once they are repaired.

“We’re starting to see successes with some of the younger members of the trust,” Carruthers said, referring to the Agapions. “We hope with some changes we can further encourage that. If we can get the incentive issue right, we’ve got a chance to make some real improvements in some needed housing stock.”

Greensboro Housing Coalition staff, who were unaware of the potential changes, rejected that idea immediately, saying it would reward property owners who flouted the fines.

“That’s terrifying,” Jana Raczkowski said.

Landlords that have been costing the city money for years and who refused to pay the fines would be rewarded for their bad behavior, she said, adding that the whole point of the fine structure was to give the city a tool to compel owners to comply. That, demolition and the never-used option of legal charges are all the city has, she said, and rather than weakening the ordinance, the city should find a way to strengthen it.

Holding property owners to the fines can force bad owners to sell, Executive Director Brett Byerly said, and that’s a good thing. And if the city is finding it difficult to ensure some owners comply with the ordinances now, how will pulling out the teeth help? he asked. Minimum Housing Commission Chair Justin Outling also said he opposes the idea.

“It brings an opportunity for abuse of the process,” he said. “In terms of the incentive for a property owner, it leaves the impression that they’re not going to have to pay that amount and now they won’t understand that time is of the essence. It may have value but the city would have to be careful in terms of providing guidelines for when those fines are waived.”

Not only would it undercut one of the city’s only enforcement mechanisms, Outling said, but it could contribute to the perception that the city doesn’t treat each case or property owner equally.

Carruthers’ proposal is still a work in progress, and staff opted not to put it on this week’s city council agenda. It will likely be considered soon, he said, adding that they want to take the time to get it right.

His office is also considering legal action on the housing cases in front of it — all of those that owe upwards of $10,000. Why the city doesn’t take every landlord who owes upwards of $10,000 to court isn’t clear; Carruthers wouldn’t discuss it or the details of any possible plans to take specific debtors to court.

“When it’s time to make an example in court, we have to pick the right example to prove there’s merit,” Carruthers said.

In the meantime, fines continue to pile up, with owners like the Agapions showing no intention of budging. Even between the end of the year — the benchmark that city staff provided when Triad City Beat began investigating the issue — and Jan. 26, when Carruthers’ office prepared an overview of the civil penalties and housing fees to date, the amount outstanding leapt considerably.

According to those numbers, which cover Feb. 28, 2014 to Jan. 20, 2015, the Agapions owe $439,725 — much more than the earlier $346,775 figure city staff provided, and a whopping 63 percent of all outstanding fines.

Dogwood Manor Townhomes and Spring Manor Apartments, the two LLCs with Nathan Tabor listed as an agent, together owe $99,025 as of last month, or 14.5 percent of outstanding fines and penalties. Carruthers said if the idea to waive fines were implemented, he thinks there would be considerable improvements on these properties in particular.

Marwan Mujali’s estate owes $82,825 according to the latest numbers, a significant jump from $55,825 at the end of 2014, albeit far lower than the amount owed by the Agapions and accounting for 12 percent of outstanding fines.

But even when viewed more broadly than the three biggest debtors, almost every single property owner fined in the last year has a listed address in the Triad. The vast majority of them live right in Greensboro. A few out-of-town offenders grace the list, to be sure, but the out-of-state addresses are outliers.

That begs the question: Do the city’s residents understand what they are doing to each other?